PTCL Group Shows Strong Interest in Acquiring Telenor Pakistan: source
Pakistan’s famous telco Telenor has been struggling with financial problems and losses for quite some time now. The company also lost a significant number of subscribers in recent times. Previously, the company was rumored to be planning to shift its operations and is also considering selling the company. Now, according to an official source, the Pakistan Telecommunication Company Limited (PTCL) is planning to make a non-binding offer to buy Telenor Pakistan for a price that could range from $800 million to $1.2 billion. At a recent meeting, the board of directors of PTCL expressed strong interest in acquiring the majority of the shares of Telenor Pakistan. Moreover, they want to take over Telenor Pakistan and also keep management control.
PTCL shows strong interest to buy Telenor Group
PTCL’s parent company, Etisalat, will provide guarantees to raise commercial loans to complete this purchase. PTCL’s intention to buy Telenor Pakistan’s shares had been passed on to Prime Minister Shehbaz Sharif, according to leading government sources. Further, the source also said that PTCL will make its offer to finalize this deal if both parties accept the non-binding offer.
Pending issues to be resolved by Etisalat:
However, there are other issues to be resolved, such as Etisalat’s request for the government to be willing to pay the deal amount in dollars outside of Pakistan in light of the country’s ongoing liquidity crisis. There are also some other unresolved concerns. These include Etisalat’s obligation to pay an outstanding $800 million for the privatization of PTCL, an issue that has persisted since 2005-2006. In several regions of the country, there are still unresolved concerns about the transfer of land in the name of Etisalat. Third, there are still unresolved issues with the PTCL employees. As a result, this agreement would only be possible if all outstanding issues are resolved.
If the purchase goes through, the PTCL will own two Pakistani companies, Ufone and Telenor Pakistan. As Ufone’s balance sheet prevents it from acquiring another major player in the market, Etisalat is willing to contribute to the completion of this anticipated transaction.
Since the government of Pakistan therefore also owns shares in PTCL. the Economic Coordination Committee of the Cabinet and the Federal Cabinet will have to give their consent if the binding offer is made by PTCL.
Moreover, it is pertinent to mention here that Federal Finance Minister and Tax Senator Mohammad Ishaq Dar presided over a discussion on the telecom industry in the finance department, according to a formal notice released by the Ministry of Finance. The meeting was attended by the Federal Minister of IT and Telecommunications Syed Amin Ul Haque, the Federal Minister of Law and Justice Senator Azam Nazeer Tarar, the Secretaries of Finance, Privatization and IT & Telecom.
During the meeting, the PTCL in particular and the telecom industry in general were discussed. Dar stressed that the government-appointed directors to PTCL’s board of directors should actively contribute to the overall performance of the company.
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