The Pakistan Telecommunication Company Ltd. (PTCL) is putting together a non-binding offer to buy Telenor Pakistan. According to reports, PTCL, which is majority controlled by the state, intends to submit an offer in the range of $800 million and $1.2 billion.
There is little doubt that Telenor has been thinking about leaving Pakistan; last year, the state-owned Norwegian telco invited bids in the region of $1 billion.
In order to consummate this agreement, the parent firm of PTCL, Etisalat, will offer guarantees to raise commercial loans. Telenor’s management has demanded payment be made in US dollars, thus agreements must be finalised before moving forward with a definitive offer to close the acquisition.
The PTCL informed the Prime Minister on Monday of its interest in acquiring Telenor Pakistan’s shares, according to top government officials.
If both parties accept the non-binding offer, the PTCL will reportedly make its bid to conclude this acquisition. If the acquisition is approved, the PTCL will own Telenor Pakistan and Ufone, two subsidiaries with operations in Pakistan.
Etisalat is prepared to help to the conclusion of this anticipated transaction because Ufone’s balance sheet forbids it from acquiring another important market player. Telenor eventually left Myanmar last year after opting to sell its assets there to Lebanese holding company M1 Group for $105 million.
If PTCL makes the binding offer, both the Federal Cabinet and the Economic Coordination Committee of the Cabinet must accept it because the Government of Pakistan also owns stock in the company.
An official notice released by the Ministry of Finance on Monday evening stated that Federal Minister for Finance and Revenue Senator presided over a discussion on the telecom sector at the Finance Division.
The Federal Ministers of Law and Justice, Finance and Privatization, and IT and Telecommunication all attended the conference. The meeting covered PTCL in particular and the telecom industry in general.
