Banks allowed to finance $940mln telecom towers deal

KARACHI: The central bank allowed local lenders to fund a joint venture firm between a Malaysian telco and a local conglomerate to acquire an estimated $940 million worth of telecom towers in Pakistan.

“Edotco Pakistan Private Limited (Edotco PK) has successfully obtained approval from the State Bank of Pakistan (SBP), allowing local lenders to fund the acquisition by Edotco PK of Jazz’s portfolio of 13,000 tower assets currently under Deodar Private Limited (Deodar),” a company’s statement said.

Last year, Edotco Group, a subsidiary of Malaysian telco Axiata, and Dawood Hercules Corp unveiled a plan to acquire Deodar, the tower unit of Pakistan Mobile Communications Ltd, known by its brand name Jazz, operating more than 13,000 cellular towers. Edotco has already added to its portfolio 700 towers in Pakistan after another $90 million acquisition deal.

Edotco PK planned to raise $600 million to acquire towers through debts and remaining via equity.

The SBP’s approval is one of the approvals related to the transaction steps on the acquisition.

“The final regulatory approvals are in process of being granted by PTA (Pakistan Telecommunication Authority) on the change of shareholding structure in Deodar,” the statement added. “This positive outcome from the government is reflective of Pakistan’s push to increase foreign direct investment into the country while fulfilling its digital agenda.”

Early this month, Edotco PK obtained the PTA’s approval on the change of shareholding in Edotco PK by way of subscription by Dawood Hercules Corporation Limited of 45 percent of the share capital of Edotco PK.