PTCL seeks to acquire Telenor Pakistan
- PTCL is interested in buying Telenor with management control.
- Etisalat to give guarantees for commercial loans.
- PTCL will possess two subsidiaries operating in Pakistan — Ufone and Telenor — if the deal is done
ISLAMABAD: The Pakistan Telecommunication Company Limited (PTCL) is ready to unleash its non-binding offer to acquire Telenor Pakistan, which is a cellular and digital services provider, The News reported Tuesday.
The telecommunication company is eyeing to buy Telenor at a possible price range of $800 million to $1.2 billion.
The PTCL’s board of directors, which gave a nod to acquiring majority shares of Telenor, is interested in buying the cellular company with management control.
Etisalat, the PTCL’s parent company, will give guarantees to raise commercial loans for making this deal done.
Payment in dollars
Telenor’s management has asked for making payment in US dollars so arrangements will have to be finalised before moving ahead toward a binding offer to accomplish the deal.
Top official sources confirmed to The News on Monday that the PTCL’s interest had been conveyed to Prime Minister Shehbaz Sharif that they were interested in acquiring the shares of Telenor Pakistan.
If both parties agree to the non-binding offer, then the PTCL will give its offer to accomplish this transaction, said the sources.
There are some issues that require settlement, as Etisalat has made a request to the government that they will be ready to pay the amount of the deal in dollars outside Pakistan keeping in view the lingering dollar liquidity crunch being experienced in the country.
There are some other outstanding issues as well, especially Etisalat has to pay an outstanding amount of $800 million on account of PTCL privatisation which could not solve since 2005-6.
There are outstanding issues of transferring land in the name of Etisalat in different parts of the country. Thirdly the PTCL’s employees’ issues also remain unresolved so all outstanding issues would have to be settled to strike this deal.
If the deal is done, then the PTCL will possess two subsidiaries operating in Pakistan — Ufone and Telenor Pakistan.
Ufone’s balance sheet does not allow it to acquire another major stakeholder in the market so Etisalat is ready to play its role in finalising this expected deal.
If the binding offer is given by the PTCL, then the Economic Coordination Committee of the cabinet and federal cabinet will have to grant approval because the Government of Pakistan also possesses shares in PTCL.
Dar chairs meeting on telecom sector
According to an official announcement made by the Ministry of Finance Monday night, Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar chaired a meeting on the telecom sector.
Federal Minister for IT and Telecommunication Syed Amin Ul Haque, Federal Minister for Law and Justice Senator Azam Nazeer Tarar, Secretary Finance, Secretary Privatisation and Secretary IT & Telecom participated in the meeting.
The meeting discussed the telecom sector in general and PTCL in particular.
Dar emphasised that the nominee directors of the government on the PTCL board must make active contributions for the best possible performance of the telecommunications company.
Gold rally in Pakistan as rupee extends losses
Gold prices climbed on Friday on the back of a sliding rupee, as markets remained focused on the State Bank of Pakistan’s (SBP) interest rate strategy.
According to the data released by All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) rose by Rs700 per tola and Rs601 per 10 grams to settle at Rs208,700 and Rs178,927.
Exchange loss likely to deprive masses benefit in petrol price cut
- Govt to announce petrol price today for next fortnight.
- Exchange loss adjustment to rob consumers of petrol price cut.
- Current exchange rate is heavily tilted in favour of the dollar.
KARACHI: Due to a sharp rise in the value of the dollar in the last two weeks, the masses may not get any benefit in the prices of petroleum products, according to a The News report.
The report said that the price of diesel is reflecting an Rs34/litre decrease for the next fortnight. The government is scheduled to review the price of petroleum products today.
The international price of crude oil has come down, which can be translated into a major cut in domestic prices of petroleum products, but only if the government passes on the full impact to the end consumers.
However, sources in the oil sector believe that the government would not pass on the full impact of the reduction in the international prices on exchange losses accumulated over the months, which had put the oil sector in a financial crunch.
The government may be deterred to pass on the impact to end consumers, as the oil sector would be in deep financial trouble if their losses are not adjusted on account of sharp exchange rate fluctuations in the past many months.
Oil sector sources told the publication that the ex-refinery price of diesel is showing Rs34/litre decrease for the next fortnight. However, the exchange losses on diesel go over Rs100/litre, which needs to be adjusted.
Sources said that the government may pass on some relief by cutting the diesel price by Rs15 to 20 per litre for the consumers while adjusting the remaining exchange losses.
Sources, however, felt that this was a ripe time for the government to adjust whatever remained of exchange loss adjustment.
The fall in crude prices gave the government enough fiscal space to accommodate the oil companies, which have been facing financial problems as they were not receiving the full amount of exchange losses.
As far as petrol is concerned, its price is showing Rs13-14 per litre decline on the basis of its ex-refinery price in the next fortnight.
Again the exchange loss adjustment may deprive the consumers of the benefit of price reduction and the government may only pass on Rs4-5 relief while adjusting the remaining amount.
The present exchange rate is heavily tilted in the favour of the dollar. It is a huge hurdle for the government, in terms of reducing the prices of petroleum products in the domestic market.
According to the oil industry estimates, the average exchange rate calculated for the next fortnight is Rs283 to determine the price of the ex-refinery.
Pakistan’s oil sector has repeatedly requested the government in many letters to resolve the exchange losses issue, with few players in the industry pleading to make it more fair and transparent.
Petrol relief package gives IMF ‘excuse’ to delay agreement
- IMF verifying from KSA, UAE on financing before staff-level deal.
- Fund rejects initial petrol subsidy plan.
- Asks Pakistan to provide more details about fuel relief package.
ISLAMABAD: The International Monetary Fund (IMF) has asked the Pakistani authorities to provide more details about the petrol relief package causing more delay in the signing of the staff-level agreement, The News reported Thursday.
The half-baked cross-fuel subsidy proposal by the petroleum ministry has failed to convince the Fund, which has rejected the initial plan arguing that more details are required to verify its sustainability.
The question arises, according to the publication, as to why the PM Office and Ministry of Petroleum announced the plan without taking the IMF review mission into confidence prior to its announcement.
The report stated that the Ministry of Finance has distanced itself from the plan proposed at a time when Pakistan and the lender are inching towards signing the agreement.
The Ministry of Petroleum has now been advised to withdraw the proposal at this stage and iron out the policy details with the Ministry of Finance and then take the IMF into confidence in the next review.
Meanwhile, Minister of State for Finance Dr Aisha Ghaus Pasha has termed the petrol subsidy plan ‘not workable’.
Speaking to journalists after attending the Senate Standing Committee on Finance meeting, Aisha Ghaus Pasha said there is no suggestion of subsidy on petroleum products and the Petroleum Division had suggested cross-subsidies on petroleum products, which is not workable.
She said that the parleys with the IMF were continuing and now the only outstanding issue remained of the lender getting confirmation on external financing from bilateral countries, including Saudi Arabia and the UAE, which was underway.
“There are indications that financial assistance is expected from bilateral friends very soon, that will help finalise the staff-level agreement with the IMF,” she said.
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