Etisalat may acquire another 26pc PTCL stakes

Etisalat may acquire another 26pc PTCL stakes

Wednesday, May 05, 2010 - By Hina Mahgul Rind KARACHI: Etisalat is likely to acquire more stakes in the telecom giant Pakistan

Telecommunication Company Limited (PTCL), a top official of the company told a Sharjah-based newspaper, Al-Khaleej, in an interview.

Mohammed Omran, Chairman, Etisalat, has expressed satisfaction over the negotiations going on with the Pakistan government over the property dispute due to which payment of $800 million has been delayed.

When contacted by The News, Naveed Saeed, Senior Executive Vice President, Commercial, PTCL, did not deny the possibility of acquiring another 26 per cent stakes by the UAE-based company and said the company is committed to the telecom sector of Pakistan.

According to the agreement, Etisalat can acquire another 26 per cent shares, Saeed said, adding that the company, being a global player, is seeking overseas telecom investment opportunities that also include Pakistan’s telecom sector.

“Although it is still early to analyse, we believe more acquisition of stakes could be a possibility as Etisalat already holds the first right of offer if the government of Pakistan sells any of its 62 per cent stakes in the company, said Saeed.

An analyst at JS Research Mustafa Bilwani said that this acquisition, if materialised, would support the long-term mergers and acquisitions in the sector.

As far as the transaction price is concerned, it would be depend on the Pakistan government and is likely be above the prevalent market price.

“We expect further clarification from the officials concerned soon,” he said.

Etisalat had acquired 26 per cent strategic stakes in PTCL in 2005 for $2.6 billion with the terms of the transaction, including increased voting rights (4 vs 1) with the management control.

Last week, PTCL announced its 9MFY10 results, registering unconsolidated earnings of Rs7.9 billion (EPS Rs1.54), up by nine per cent year-on-year. The company also announced 17.5 per cent cash dividend.