According to the news agency reported on Tuesday, the Pakistan Telecommunication Company Limited (PTCL) is prepared to make a non-binding offer to buy Telenor Pakistan, a company that offers cellular and digital services.
The telecom firm is considering purchasing Telenor for between $800 million and $1.2 billion.
The PTCL board of directors is interested in purchasing the cellular company with managerial control and has approved purchasing the majority of Telenor’s shares.
The parent firm of PTCL, Etisalat, will provide guarantees to raise commercial loans in order to close this purchase.
Telenor asked to pay in US Dollars
Before moving forward with a definitive offer to complete the acquisition, preparations must be resolved because Telenor’s management has requested payment to be made in US dollars.
The PTCL’s intention in acquiring the shares of Telenor Pakistan had been communicated to PM Shehbaz Sharif, top government sources confirmed to the news agency on Monday.
According to the sources, PTCL will make its offer to complete this transaction if both sides accept the non-binding offer.
There are other difficulties that need to be resolved, such as Etisalat’s request to the government that they be prepared to pay the deal’s sum in dollars outside of Pakistan in light of the country’s continuing dollar liquidity crisis.
PTCL outstanding issues
There are still some unresolved concerns, including Etisalat’s obligation to pay an outstanding $800 million due to the privatization of PTCL, a problem that has persisted since 2005–2006.
In several regions of the nation, there are still unresolved concerns with the transfer of land in the name of Etisalat.
Thirdly, there are still unsolved issues with the PTCL employees. As a result, this agreement would only be possible if all outstanding issues were resolved.
If the purchase goes through, the PTCL will own two Pakistani-based companies, Ufone and Telenor Pakistan.
Because Ufone’s financial situation prevents it from acquiring another significant market player, Etisalat is prepared to contribute to the completion of this anticipated transaction.
Because the Government of Pakistan also owns shares in PTCL, the Economic Coordination Committee of the cabinet and federal cabinet will need to provide their permission if the binding offer is made by PTCL.
Senator Ishaq Dar, the federal minister of finance and revenue, presided over a meeting on the telecom industry, according to a formal notice released by the ministry of finance on Monday evening.
The meeting was attended by the Federal Minister for IT and Telecommunication Syed Amin Ul Haque, the Federal Minister for Law and Justice Senator Azam Nazeer Tarar, the Secretaries of Finance, Privatization, and IT & Telecom.
The meeting covered PTCL in particular and the telecom industry in general.
Ishaq Dar emphasized that the government’s nominees for the PTCL board must actively participate in ensuring the best performance possible for the telecom providers.
Why Telenor wants to leave Pakistan
Due to bad financial and economic conditions, Telenor has decided to shut down its operations in Pakistan. It is already in the news that a large company will leave Pakistan and now we know that it is Telenor.
The similar assertion was made by the Ministry of IT and Telecom when it informed the Standing Committee two weeks ago that Telenor had chosen to depart Pakistan.
The cellular services company informed the federal government of the issues facing the telecom industry, but the government does not control the telecom industry. However, no steps have been taken to address the problems.
To read our blog on “Telenor Pakistan will be purchased by an Emirati firm for $1 billion,” click here.
