Re: Pakistan Govt receives 1st installment of $ 2.6 billion PTCL Bid
Etisalat Deal May Open Door for More FDI in Pakistan
Muhammad Aftab, Arab News
ISLAMABAD, 27 June 2005 — The capital market and the government gave Gulf investors a big applause as United Arab Emirates’ telecom giant Etisalat bought Pakistan’s most profitable telecom monopoly, while new opportunities opened up for investment in big dividend companies. UAE dominated the economic scene last week, reflecting Gulf’s growing investment and business relations with Pakistan. The euphoria was created by Etisalat’s $2.59 billion purchase of 26 percent shares of the state-owned Pakistan Telecommunications Corporation Ltd. (PTCL) with management control. It is reflected in statements by Prime Minister Shaukat Aziz and Dr. Ishrat Hussain, governor, State Bank of Pakistan (SBP), and top business leaders, for its impact on FDI inflows.
Special applause was focused on UAE President Sheikh Khalifa ibn Zayed Al-Nahyan, and UAE government. Dr. Mohamed ibn Khalfan ibn Kharbash, chairman, Etisalat, and the company’s Chief Executive Officer Obaid Saeed ibn Mes’har, were specially praised for investing in Pakistan. Obaid Saeed expects $2.59 billion “investment to pay off within five years, hopefully, sooner.” Regarding Etisalat’s $1.96 a share bid, he says, “we feel this is the right value.” His optimism is based on vast market opportunities and the fact that Etisalat will have PTCL’s management control. Etisalat will fund the deal with 25 percent equity and 75 percent bank borrowing, with Dubai Islamic Bank’s making 10 percent equity and 10 percent of debt portion.
The Etisalat entry in the market will open the doors for other UAE potential investors to bolster economic and trade ties between our two countries. It’s a major and very significant transaction, which is also very important from strategic point of view… There are natural synergies between UAE and Pakistan and the private sectors of the two countries.” On the back of PTCL deal, Aziz has decided to speed up the ongoing process of privatization, sale and investment in several mega, state-owned, high yield companies.
These include: the 70 percent oil market distributor and leader Pakistan State Oil (PSO), oil explorer and producer Pakistan Petroleum Ltd. (PPL), important financial market player National Investment Trust (NIT) and the giant Pakistan Steel Mills (PSM), among others. Etisalat acquisition and management control of PTCL, comes just 27 days after Sheikh Nahyan ibn Mabarak Al-Nahyan’s Abu Dhabi Group (ADG) started Alwarid in Pakistan — its $400 million, state of the art, highly innovative and aggressively competitive cellular services in Pakistan. ADG has invested in banking, real estate and telecom, including long distance and international (LDI), and wireless local loop (WLL). The group has invested $170 million in modern Bank Alfalah Ltd., $104 million in United Bank Ltd., and $100 million in Wateen Telecom (Pvt) Ltd. Pakistan hopes to attract more FDI from Gulf and other investors, on the back of Etisalat deal.
http://www.arabnews.com/?page=6§ion=0&article=66017&d=27&m=6&y=2005