SBP nod sought as PTCL Group, Telenor Pakistan deal enters final stages

PTCL approached consortium of lenders for loan of $350 to $400mn to purchase Telenor Pakistan, say sources

Mehtab Haider
The front facade of the PTCL headquarter in Islamabad. — APP
The front facade of the PTCL headquarter in Islamabad. — APP

  • Possible deal expected to be finalised by November 2023.
  • Many questions have arisen over this possible deal.
  • "We are currently in the final stages of commitment," says IFC spox.

ISLAMABAD: A possible financial deal between PTCL Group and Telenor Pakistan is expected to be finalised by next month as the State Bank of Pakistan (SBP)’s regulatory permission has been sought for the acquisition of the Norwegian-based cellular firm, The News reported on Saturday.

The PTCL Group is negotiating a loan of up to $400 million from a consortium of the World Bank’s lending arm of private sector, the International Finance Corporation (IFC), and a Chinese firm. It is expected that the possible deal will be finalised by November 2023.

“The PTCL Group has approached a consortium of lenders including World Bank’s lending arm for private sector and a Chinese firm to secure loan of $350 to $400 million to purchase Telenor Pakistan,” sources confirmed to The News on Friday.

Many questions have arisen over this possible deal. It is yet to be ascertained whether the chairman of the PTCL Board has taken approval of the ECC and the cabinet. How will this amount be transferred to another country as the selling party wants the funds in their foreign currency accounts? Has the SBP granted its approval in these economic conditions? What will happen to the transfer of properties in the name of PTCL due to which $800 million got stuck up in the last one and a half decades? Will this lingering controversy over the $800 million outstanding amount be resolved? Is the interim government fully authorised to make such big decisions?

The government is going to sell its assets to foreign investors. But in the case of this deal, the government would enhance its liability burden under which its stakes holding company would secure more dollar loans. There are federal secretaries representing the government of Pakistan in the PTCL’s Board, so how do they grant their nod if the GOP holds majority stakes in PTCL?

All these pertinent questions need proper answers before finalising this transaction.

The IFC spokesperson said: “We are currently in the final stages of commitment, so we are unable to comment on this transaction currently. Happy to speak to you once this is finalised”. 

The News also reached out to spokesperson of SBP for a comment but is yet to receive a reply.

When Telenor’s Board holds its meeting probably by the end of November and grants its assent, then the regulatory procedural approvals would be sought from the respective regulators, including PTA and CCP.

Meanwhile, IT secretary held a meeting with visiting Telenor’s Head of Asia Børre Furberg in his office on Friday. 

According to an official announcement made here, Federal Secretary for IT and Telecom Hassan Nasir Jamy has said the government is taking vigorous steps to provide maximum facilities to the telecom sector.