Etisalat: Deal Reached On Pakistan Telecom Sale
BERLIN (Dow Jones)--United Arab Emirates-based Emirates Telecommunications Corp. said Tuesday it has reached an agreement with the government of Pakistan on completing its purchase of 26% in Pakistan Telecom.
A team from the company, known as Etisalat, will travel to Pakistan next week to finalize the transaction, which is expected to be completed in January 2006, the company said.
Since late October, the Pakistan government has been in talks to salvage the sale of the stake in Pakistan Telecom, or PTCL.
The $2.6 billion deal is a key part of the country's privatization program and will provide cash to help curb its budget deficit.
Etisalat had agreed in June to buy the stake in the company and subsequently paid a first installment of 10% of the purchase price. But the operator failed to pay the remaining amount by the Oct. 28 deadline, prompting negotiations between both parties to rescue the deal.
People familiar with the matter had said Etisalat had balked at the high price it agreed to pay. Etisalat had trumped both China Mobile Communication Corp. and Singapore Telecommunications Ltd. in the auction.
Talks with Pakistan's representatives have now "resulted in resolution of all issues," Etisalat Chief Executive Mohamed Hassan Omran said in a statement. Omran led the latest round of negotiations with Abdul Hafeez Shaik, Pakistan's minister for privatization and investment.
Etisalat looks forward to "participating in the dynamic telecom sector in Pakistan," he said.
The statement did not provide details of the agreement.
Etisalat's original bid for the PTCL stake was $1.96 a share, almost double China Mobile's $1.06, and well above the $0.88 tabled by SingTel. The Etisalat side had sought concessions to narrow the gap between the offers.
The acquisition is aimed at gaining exposure to a fast-growing market that has attracted attention from other foreign players, including Telenor ASA and Warid Telecom, a company backed by Abu Dhabi-based investors. Both have wireless licenses.
Etisalat has explored several acquisitions this year, and recently made it onto the shortlist for the privatization of a chunk of Tunisian incumbent Tunisie Telecom.
The company, majority-owned by the United Arab Emirates government, lost out to Vodafone Group PLC in the bidding for Turkish wireless operator Telsim Mobil Telekomunikasyon and Oger Telecom in the bidding for fixed-line company Turk Telekom.
Company Web site: http://www.etisalat.co.ae
http://www.ptcl.com.pk
-By Taska Manzaroli; Dow Jones Newswires; +49 30 2888 410; taska.manzaroli@dowjones.com (Imran Maqbool in Karachi contributed to this item.)
(END) Dow Jones Newswires"
Posted to the site on 20th December 2005