By Alex Ritman
Following on from an agreement last month, Etisalat will pay US$1.14 billion immediately for the stake, with the rest payable in nine instalments.
Etisalat will officially take over management control of Pakistan Telecommunication Company Limited (PTCL) in next month. The takeover will come three months after Etisalat was to make the final payment of the US$2.6 million it bid for a 26% stake in the Pakistani incumbent.
Having already laid down US$260 million as a deposit, the UAE operator will pay around US$1.14 billion immediately. The US$1.19 billion remaining will be paid in nine instalments, backed by corporate guarantees, every six months.
Last month Etisalat and the Pakistan government reached an agreement for payment by way of instalments after a series of talks to keep Etisalat in the deal following its non-payment of the remainder of the funds for the stake. Having won the bid in June 2005, Etisalat missed an October deadline to pay the second instalment and concerns were raised that the deal would fall through. The realisation of the significant premium offered by Etisalat was cited as the main reason for the stalling of payments. China Mobile and Singaporean operator SingTel, the second and third placed bidders for the stake, bid US$1.41 billion and US$1.17 billion respectively.
A plan to offload up to 25% of class ‘A’ shares in PTCL over the next five years has also been approved by the Pakistan Cabinet Committee on Privatisation. Etisalat has been given the option to buy the shares by matching the highest bid.