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Tuesday May 21, 2024

PTCL secures $400 million IFC deal for Telenor takeover

The company said that the finalization of workstreams to sign financing agreements with IFC is underway

By Our Correspondent
April 09, 2024
The picture shows a building of Pakistan Telecommunication Company Limited (PTCL). — PPI/File
The picture shows a building of Pakistan Telecommunication Company Limited (PTCL). — PPI/File

KARACHI: Pakistan Telecommunication Company Limited (PTCL) said on Monday it has secured a debt financing deal of up to $400 million from the International Finance Corporation (IFC), the World Bank’s investment arm, to complete its acquisition of Telenor Pakistan.

“It is to inform that the Board of Directors of the International Finance Corporation (IFC) has approved the debt financing of up to $400 million to PTCL for the acquisition of Telenor Pakistan,” PTCL said in a notice to the Pakistan Stock Exchange (PSX).

The company said that the finalization of workstreams to sign financing agreements with IFC is underway and is expected to be completed on or before July 31, 2024. “The details of the debt financing will be disclosed upon the finalization of the financing agreements.”

Following the announcement, PTC’s share price rose by 83 paisas to Rs17.02 per share.Last year in December, Norway's Telenor announced it had agreed to sell its Pakistan unit to the state group Pakistan Telecommunications in a transaction valuing the unit at 5.3 billion Norwegian crowns. This includes repayment of intercompany loans of 3.5 billion Norwegian crowns and reduced interest-bearing liabilities of 1.8 billion Norwegian crowns, including leases.

PTCL then entered into a Share Purchase Agreement (SPA) with the shareholders of Telenor Pakistan for the acquisition of 100 percent of the shares on a cash-free, debt-free basis. At that time, PTCL informed that the acquisition would be financed by external debt.

The Norwegian group has been restructuring its Asian businesses, building bigger units in Thailand and Malaysia via local mergers, and has decided on the divestment of its telecom operations in Pakistan.

Telenor Pakistan, launched 18 years ago, has 45 million customers.PTCL’s major assets include Ufone, a mobile operator in Pakistan with over 20 million customers and U Microfinance Bank. Etisalat, with a 26 percent stake, runs it under an agreement with the government of Pakistan, which holds 62 percent stake.

Ufone will haveover 70 million users after the deal, almost equal to those of Jazz, which acquired Warid Telecom some eight years ago.Analysts said the PTCL's acquisition is one of the biggest acquisition deals in Pakistan despite its economic challenges.

Pakistan has 194 million cellular subscribers and 124 million broadband subscribers, according to PTA.There are four major telecommunication providers, including Jazz, owned by Netherlands-based Veon, Zong, owned by China Mobile, and Norway.