Etisalat stalls $800m Pakistan payment as dispute lags

[Edevelop]

DUBAI - Etisalat has told Pakistan it will not pay the $800 million it owes the government from buying a stake in the country’s state telecom operator until a property dispute is entirely resolved, finance ministry sources said.
The money owed, which dates back to last decade, would provide vital funds for Pakistan’s cash-strapped government, but Etisalat will not pay up until affiliate PTCL receives ownership of the final 10 properties out of about 3,000 it is due, the sources, speaking on condition of anonymity, told Reuters.
Etisalat did not respond to requests for comment. PTCL’s chief executive Walid Irshaid could not be reached for comment. An Etisalat consortium bought a 26 per cent stake in PTCL for $2.6 billion in 2005 that also gave Etisalat majority voting rights. The UAE firm paid an initial $1.80 billion as per the deal terms, which also included transferring ownership of the properties to PTCL from the government. Etisalat was to pay the remaining $800 million it owed in six twice-yearly installments of $133 million, but has withheld payment as the transfer of some of these properties stalled.
The dispute continues while Ufone, waits to hear if its bid for smaller rival Warid has succeeded. The UAE firm has been working with various ministries including those for finance and privatisation since July to resolve the dispute, the sources said. The government had hoped to reach a final agreement by November-end, but this was now unlikely. “It is being carried out on a fast track basis and being followed up at the highest level,” said one source. PTCL’s current market value is $858 million, according to Reuters data, a little more than what Etisalat owes the government. Etisalat owned 90 per cent of the acquiring consortium, giving it a 23.4pc stake in PTCL. The consortium’s bid was $1.2b more than the next highest offer and Etisalat took an impairment of 2.37billion dirhams on PTCL in 2012. Profits at PTCL, have slumped since Etisalat took management control and the sector was opened up for more competition. In the financial year ending June 30, 2005, the Pakistani operator made a net profit of Rs27.3b ($257.78m), according to Reuters data, but seven years later its annual profit was 11.4 billion rupees. Ufone had 24.8 million subscribers as of Sept. 30, giving it a market share of 19 per cent, data from Pakistan’s telecom regulator shows.

Etisalat stalls $800m Pakistan payment as dispute lags

 

[Al Bhatti]

February 4, 2015

Pakistan seeks settlement with Etisalat in $800m dispute
Etisalat owes money as part of investment in Pakistan telecom

Pakistan estimates 34 properties due to Etisalat are worth $92 million (Dh337 million), a government official said, meaning the telecom operator could still owe the government $708 million in a near decade-long dispute that is slowly being resolved.

Recovering this amount, equivalent to 71.61 billion Pakistani rupees (Dh2.5 billion), and close to Pakistan’s combined federal budget for education (64 billion Pakistani rupees) and health care (10 billion Pakistani rupees) in 2014-15, would be a welcome boost to the cash-strapped administration.

An Etisalat-led consortium in 2005 agreed to pay $2.6 billion for 26 per cent of Pakistan Telecommunication Co (PTCL), but the Abu Dhabi-listed operator has withheld $800 million because the government did not transfer the titles of some properties to PTCL as per the deal terms.

Of the 3,500 properties destined for PTCL, all but 34 have now been handed over to the former telecom monopoly, Azeem Qadir, a consultant for Pakistan’s Ministry of Privatization, said.

The remaining 34 cannot be signed over due to ownership complications and so the value of these properties will be deducted from the amount Etisalat owes.

The government and Etisalat have each hired independent firms to assess the properties on their behalf and submit a valuation to HSBC, the holder of an escrow account relating to the disputed properties, Qadir said.

Pakistan did so in January, valuing them at $92 million and is now awaiting Etisalat’s valuation, he said.

The higher of the two estimates will then be used to calculate a final settlement, although the government could go to arbitration if Etisalat suggests a markedly higher price, Qadir added.

Etisalat, which did not respond to requests for comment on the matter, paid an initial $1.8 billion for the PTCL stake and was due to pay the remaining $800 million in six twice-yearly instalments of $133 million.

The UAE operator owned 90 per cent of the acquiring consortium, giving it a 23.4 per cent stake in PTCL.

The consortium’s bid was $1.2 billion more than the next highest offer and in 2012 Etisalat took an impairment of $645 million on PTCL, whose current market value is $953 million, Reuters data shows.

PTCL reported a loss of 407 million Pakistani rupees in the three months to September 30, according to Reuters data, while its annual profit fell by nearly half from 2004 to 2013.

Pakistan seeks settlement with Etisalat in $800m dispute | GulfNews.com

 

[Bilal.]

he he he he ek biradrislamik mumalik apne muskeen birader ke saath aisa kaise ker sakta hai

Business is business. The money will released once the dispute is resolved. On the other hand UAE's Pakistan Assistance Program is going strong and had crossed $300 million more than a year ago. As shown below, birader helping birader...

UAE’s welfare projects in Pakistan top one billion dirhams - thenews.com.pk

 

[black-hawk_101]

Will it buy the whole PTCL by 100% or will leave it forever?