ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) is set to issue its non-binding offer to acquire Telenor Pakistan, a cellular and digital services provider.
The telecommunications company is considering buying Telenor for a possible price of $800 million to $1.2 billion.
PTCL’s board of directors, which approved the acquisition of majority stake in Telenor, is interested in buying the cellular company with management control.
Etisalat, the parent company of PTCL, will guarantee the commercial loan extension to complete the deal.
Payment in dollars
Telenor’s management has asked to be paid in US dollars so arrangements will have to be finalized before moving towards a binding offer to close the deal.
Top government sources confirmed to JEE News on Monday that PTCL’s interest has been conveyed to Prime Minister Shehbaz Sharif that it is interested in acquiring the stake in Telenor Pakistan.
If both parties agree to the non-binding offer, PTCL will make its offer to complete the transaction, the sources said.
There are some issues that need to be settled, such as Etisalat requesting the government to be willing to pay the deal in dollars outside of Pakistan, keeping in mind the prolonged dollar liquidity crisis in the country.
Unusual problems
There are also some other outstanding issues, notably the $800 million outstanding payment Etisalat has to pay towards the privatization of PTCL which has not been resolved since 2005-6.
Land transfer cases in the name of Etisalat are pending in different parts of the country. Thirdly, PTCL employees’ issues are also pending so all outstanding issues have to be resolved to terminate the contract.
If the deal goes through, PTCL will have two subsidiaries operating in Pakistan – Ufone and Telenor Pakistan.
Ufone’s balance sheet does not allow it to acquire another major stakeholder in the market so Etisalat is ready to play its part in finalizing the expected deal.
If a binding offer is made by PTCL, the Cabinet and the Economic Coordination Committee of the Federal Cabinet will have to give their approval as the Government of Pakistan also holds shares in PTCL.
Dar presided over a meeting related to the telecom sector.
According to an official announcement made by the Ministry of Finance on Monday night, Federal Minister for Finance and Revenue Senator Muhammad Ishaq Dar presided over a meeting related to the telecom sector.
The meeting was attended by Federal Minister IT and Telecommunication Syed Aminul Haq, Federal Minister Law and Justice Senator Azam Nazir Tarar, Secretary Finance, Secretary Privatization and Secretary IT and Telecom.
In the meeting, the telecom sector in general and PTCL in particular were discussed.
Dar emphasized that the government nominated directors on the PTCL board should play an active role for the best performance of the telecommunication company.
