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PTCL in talks with IFC for $400m loan to acquire Telenor

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7 months ago

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  • BoD authorised PTCL to offer binding purchase offer.
  • PTCL group and IFC at advanced stage for finalising loan.
  • Major chunk of liabilities will be borne by government.

ISLAMABAD: The Pakistan Telecommunication Company Ltd (PTCL) is in discussions with a World Bank subsidiary, the International Finance Corporation (IFC), requesting a loan of approximately $400 million to facilitate the purchase of Telenor Pakistan.

After thorough due diligence was conducted, the PTCL’s Board of Directors, on August 29 this year, authorised the company to present a binding purchase offer to the target company.

Even though the name of the specific company was omitted from the written correspondence with the Security Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange, it was understood that Telenor Pakistan was planning to sell its stakes and was set to withdraw 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,” sources told The News on Tuesday.

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% shares are with another shareholder, it clearly means that the major chunk of liabilities will be borne by the Government of Pakistan.

“Telenor has not applied to the Pakistan Telecommunication Authority (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,” said a spokesperson for the authority. 

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 if 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 regulators such as the CCP. All these procedural requirements would be fulfilled once Telenor’s Board granted its assent probably within the two-month period.

A question was also sent to the IFC last Saturday to seek its version but no reply was given till the filing of this report on Tuesday night.

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Pakistan’s gold prices are still declining; see the most recent

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American gold futures dropped 0.6% to $2,361.

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A mission team led by Nathan Porter, the IMF’s Mission Chief in Pakistan, is meeting with a Pakistani delegation led by Finance Minister Muhammad Aurangzeb.

According to sources familiar with the situation, Islamabad may face more difficult options, such as raising power and gas bills.

Mr. Aurganzeb informed the IMF team that the country’s economy has improved as a result of the IMF loan package, and Islamabad is ready to sign a new loan programme to further develop.

The IMF mission expressed satisfaction with Islamabad’s efforts to revive the country’s struggling economy.

The IMF praised Pakistan’s economic growth in its staff report earlier this week, but warned that the outlook remains challenging, with very high downside risks.

The country nearly avoided collapse last summer, and its $350 billion economy has stabilized since the end of the last IMF program, with inflation falling to roughly 17% in April from a record high of 38% last May.

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Petrol prices are likely to drop significantly beginning May 16.

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5 days ago

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According to sources, the government is set to decrease petrol prices by Rs 14 per litre and diesel prices by Rs 10 on May 16 for the next fortnight’s revision.

Last month, the government reduced the price of fuel and high-speed diesel by Rs5.45 and Rs8.42 per fortnight, respectively.

The current fuel price is Rs288.49 per litre, while the HSD price is Rs281.96.

Meanwhile, oil prices fell further on Monday, as signs of sluggish fuel consumption and comments from U.S. Federal Reserve officials dimmed optimism for interest rate reduction, which may slow growth and reduce fuel demand in the world’s largest economy.

Brent crude prices down 25 cents, or 0.3%, to $82.54 a barrel, while US West Texas Intermediate crude futures fell 19 cents, or 0.2%, to $78.07 per barrel.

Oil prices also declined on signals of poor demand, according to ANZ analysts, as gasoline and distillate inventories in the United States increased in the week before the start of the driving season.

Refiners throughout the world are dealing with falling diesel profitability as new refineries increase supply and warm weather in the northern hemisphere and weak economic activity reduce demand.

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