PTCL in talks with WB subsidiary for $400m loan

ISLAMABAD: The Pakistan Telecommunication Company Ltd (PTCL) has been negotiating a loan request of approximately $400 million from the World Bank’s subsidiary International Finance Corporation (IFC) in order to secure the acquisition of Telenor Pakistan.

After conducting a due diligence process, the Board of Directors of the PTCL group, on August 29, 2023, authorised the company to offer a binding offer to the target company. Although, the name of the company was not mentioned in the letter written to the Security Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange, it was a known fact that Telenor Pakistan was going to sell its stakes and on its exit from the country.

“The PTCL group and IFC are at an advanced stage for finalising a $400 million loan which may be utilised for securing Telenor transaction,” top official sources confirmed while talking to The News here on Tuesday. The Telenor’s Board of Directors is expected to meet in November or December 2023 in order to consider granting approval of a binding offer. It was learnt that they have so far received two offers, one from a Lebanese group and the second from the PTCL group.

Now there are relevant and pertinent questions that need to be answered before moving ahead. As per the letter to the stock exchange, the PTCL has shown intent to buy Telenor Pakistan which may have transactions of more than $400 to $500 million. Although, financing will be arranged by the PTCL since only 26 percent shares are with another shareholder, it clearly means that the major chunk of liabilities will be borne by the Government of Pakistan.

This scribe sent a question to the spokesperson for Pakistan Telecommunication Authority (PTA) and got a reply:

“Telenor has not applied to the PTA for any potential buyout nor any document submitted for its proposed plan in relation to the same. The PTA will provide its input as and when Telenor will approach officially.”

This scribe sent out questions to Telenor Pakistan’s spokesperson inquiring whether they received a binding offer and when they were going to finalise it. The spokesperson replied: “We do not comment on speculative news.” When asked the Telenor Asia Pacific head has been visiting Pakistan and whether his visit is part of the deal or not, he replied: “Peter Borre Furberg was appointed Telenor’s Head of Asia recently and started in the role on October 1, 2023. He is visiting Telenor Asia’s operating companies in the region, including Telenor Pakistan, as part of his boarding programme.”

The sources said that the possible deal between the PTCL group and Telenor Pakistan was just at the processing stage, so it has not yet been shared with the regulators such as the CCP. All these procedural requirements would be fulfilled once Telenor’s Board granted its assent probably within two-month period.

This scribe also sent out a question to the IFC last Saturday to seek its version but got no reply till the filing of this report on Tuesday night.