ISLAMABAD, Oct 29: Pakistan’s largest-ever $2.6 billion privatization transaction of Pakistan Telecommunication Company Limited (PTCL) has failed to materialize despite last-minute government intervention, it was officially confirmed.
Therefore, an emergency meeting presided over by Prime Minister Shaukat Aziz on Saturday night decided to refer the matter to the Cabinet Committee on Privatization (CCOP) to take next steps of the transaction.
“In spite of the necessary facilitation within the transaction framework, Etisalat failed to make payment of the balance bid amount within the mutually agreed extended timeline of October 28, 2005,” said a statement officially issued by the Privatization Commission at 2200 hours on Saturday.
“The matter is being referred to the Privatization Board and to the Cabinet Committee on Privatization for their guidance on the next steps of the transaction,” the brief statement issued after the meeting said.
The meeting was also attended by Minister for Privatization Dr Abdul Hafeez Sheikh and Minister for Information Technology and Telecommunications Owais Ahmed Khan Leghari.
This is the second major privatization deal in about a year that has met with failure. Earlier, Kanooz Al-Watan of Saudi Arabia, the highest bidder of Karachi Electric Supply Corporation (KESC), had backed out of its offer.
The ministers for privatisation and telecommunications held back-to-back meetings throughout Saturday and also remained in contact with the UAE-based company but were unable to bridge the differences.
I think Etisalat stepped back realsing they werent going to get much of the market share provided the local competition. It is used to working on monopolistic terms and generate profit. The competition would have broken their back. Especially seeing the failure of 'Warid' (a telecom started by the ex-CEO of Etisalat), they probably thought the best way out was to pretend their inability to pay (This is just my analysis and I may be wrong).
Emirates Telecom has suffered major failure in some of its' recent large scale campaigns this year (eg; NAJM) and they are in the process of down sizing. 50% of man power has been eliminated. Could be few reasons of this back out.
The deal is still on. One of the President confidante have flown to Dubai, to sort out the differences. President Musharraf had to intervene in the whole process at the last moment, fearing that the deal might go sour...More details will emerge within next couple of days.
So now a new company is intersted.. Pakistan has the worst luck…
SINGAPORE, Oct 31: Singapore Telecommunication Company, Southeast Asia’s biggest telecom provider by market capitalization, said on Monday it remained interested in investing in Pakistan, two days after the country’s biggest telecommunication privatization failed.
“We remain interested in Pakistan. We take a disciplined approach with our investments,” Peter Heng, director, corporate communications at the company, told Dow Jones Newswires. http://www.dawn.com/2005/11/01/ebr11.htm
The Pakistani government said on Saturday the United Arab Emirates-based Emirates Telecommunication Corp (Etisalat), which offered the highest bid to buy a 26 per cent stake in Pakistan Telecommunications Company Ltd (PTCL), had failed to make the final payment of the bid amount within the stipulated time.
SingTel was the third highest bidder in the bidding process.
On June 18, Etisalat bid $1.96 per share for the 26 per cent stake, or 1.326 billion shares, along with management control of PTCL. The bid totalled $2.598 billion.
Later, the Pakistani government approved Etisalat’s bid and under the arrangement the firm deposited $260 million, or 10 per cent, as a first instalment within 10 days of the formal approval. The rest of the bid amount was required to be deposited within 60 days, but despite an extension of the time period Etisalat failed to pay by the deadline.
Heng said the company would like to invest in Pakistan if there was a “strategic fit and the price must be right.” —Dow Jones Newswires
LAHORE: The efforts of Privatisation Commission for the time being seem to have salvaged the PTCL deal with Etisalat or Emirates Telecommunication Corporation, as the latter has shown its willingness to pay the money in two weeks time, sources confided to The News on Tuesday.
Sources said the six-member delegation headed by Minister for Privatisation Abdul Hafeez Sheikh, which flew to the UAE late on Sunday night, held detailed talks with the UAE Minister for Communication and the Etisalat management to settle the lingering issue.
"Etisalat is demanding to cut the bid money below $ 2 billion as it thinks that it has over-bid. However, this demand of the Etisalat was rejected outrightly," sources maintained. “Both the parties discussed the pros and cons of the issue and hopefully it will be settled till the new deadline,” sources quoted Hafeez Sheikh as having told reporters in Dubai. http://jang.com.pk/thenews/
They put down a $50M deposit and second Pak telephone base is to expand from 15 million to almost over 35 million mobil and fixed line subscribers in next 2 years....With business doing good why are they pulling out now unless of course its a rumor.
this is quite stupid, if they won the auction they must buy it, there should be no other option. did they just put a 2.5billion dollar for the fun of it. if they dnt then usa should make sure Etisalat is finished or atleast give them a heavy fine.