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Fri 2 Jul 2010 10:54 AM

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Etisalat seeks PakTel deal discount

Etisalat wants outstanding land sales in its buy of Pakistan Telecom deducted from deal value.

Etisalat seeks PakTel deal discount
(Getty Images)

Etisalat wants outstanding land sales in its buy of Pakistan Telecommunications Co deducted from the deal value, a letter to the Pakistan government seen by Reuters showed, although an official rebuffed the idea.

UAE-based telco Etisalat has been locked in a dispute over the $2.6 billion buy of a 26-percent stake in the Pakistani firm since 2006, due to complications over land sales linked to the deal.

Etisalat International Pakistan (EIP) has paid only $1.8 billion so far, as it awaits the transfer of the land, and in a June 20 letter seen by Reuters, it sought to deduct the value of the land yet to be transferred, estimated at some $450 million.

In the letter, EIP asked the Pakistani government to suggest a cut-off date for the deduction and receive the balance of the payment.

However, a Pakistani official told Reuters on Thursday, under the condition of anonymity, that it would "not accept any discounts" on the outstanding $800 million, although it would accept an initial $500 million and the balance at a later date.

"The remaining properties are private and not linked to the government at all, that's why it's taking more time," the official said, declining to give a date when he expected the land transfers to be finalised.

The deal included the transfer of some 3,000 properties mainly located in the Punjab and Sindh provinces to Etisalat, of which 93 percent had been handed over, a government official told Reuters in December.

Etisalat could not immediately be reached for comment.

Etisalat, the Arab world's second-biggest telecoms firm, has faced increased competition in its home market after its monopoly was broken in 2007 by Dubai-based du.

Etisalat, operating in 18 countries, including Egypt and India, is one of a number of Gulf Arab telecom operators that have expanded overseas after losing their monopolies at home.

Pakistan owns 62 percent of Pakistan Telecommunications Co, while 12 percent is held by the general public. (Reuters)

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