According to a leading publication, Pakistan Telecommunication Company Limited (PTCL) is preparing to make a non-binding bid to acquire Telenor Pakistan for a price ranging from $800 million to $1.2 billion.
Last Monday, the PTCL Board of Directors approved expressing interest in acquiring a majority stake in Telenor Pakistan. They wish to acquire Telenor Pakistan with management control.
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Etisalat, the parent company of PTCL, will provide guarantees to raise commercial loans in order to complete this transaction. Telenor’s management has requested payment in US dollars, thus preparations must be agreed before proceeding to a definitive offer to close the acquisition.
Top official sources stated that the PTCL has expressed an interest in acquiring Telenor Pakistan’s shares to Prime Minister Shehbaz Sharif. If both sides accept the non-binding offer, the PTCL will make an offer to complete the sale, according to official sources.
There are other concerns that must be resolved, such as Etisalat’s request to the government that they be prepared to pay the value of the contract in dollars outside of Pakistan, despite the country’s ongoing dollar liquidity crisis.
There are some other lingering difficulties, like Etisalat’s need to pay $800 million in PTCL privatisation payments that have not been resolved since 2005-6.
There are lingering difficulties with the transfer of land in the name of Etisalat in several parts of the country. Third, the PTCL’s personnel difficulties remain unsolved, thus all outstanding issues must be handled in order to close this purchase.
If the transaction is completed, the PTCL will have two operating companies in Pakistan: Ufone and Telenor Pakistan. Because Ufone’s balance sheet does not allow it to purchase another large investor in the market, Etisalat is prepared to play a role in closing this anticipated transaction.
If the PTCL makes a binding offer, the Economic Coordination Committee of the Cabinet and the Federal Cabinet must approve it because the Government of Pakistan owns shares in PTCL.
According to a Ministry of Finance notice made Monday night, Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over a discussion on the telecom sector at the Finance Division.
Syed Amin Ul Haque, Federal Minister for Information and Telecommunications, Senator Azam Nazeer Tarar, Federal Minister for Law and Justice, Secretary Finance, Secretary Privatization, and Secretary IT & Telecom all attended the meeting.
The discussion focused on the telecom industry in general and PTCL in particular. Dar stressed that the government nomination directors on the PTCL Board must actively contribute to the PTCL’s best possible performance.
