Pakistan Telecommunication Company Limited (PTCL), a part of the e& Group (e&), has announced the acquisition of 100 percent of Telenor Pakistan, as per a stock filling.
According to the filing, PTCL has signed a Share Purchase Agreement with Telenor Pakistan for the acquisition of a 100% stake in Telenor Pakistan (Pvt) Ltd (Telenor Pakistan).
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This acquisition is based on an Enterprise Value of Rs. 108 Billion, and it is a cash-free, debt-free transaction.
The transaction values Telenor Pakistan at $495 million on a cash-and-debt-free basis. This includes repayment of intercompany loans of $325 million and reduced interest-bearing liabilities of $167 million, including leases.
PTCL said that acquisition will be financed by external sources, and would mainly be recorded as debt.
The PTCL Group had been engaged in discussions with the Norwegian operator for the acquisition of its Pakistani arm for some time. This possibility was first hinted at by the Telenor Group CEO in 2022, when he indicated the group’s shift in focus from Asia to Europe and the potential divestiture of its Asian assets, including Pakistan.
“We are looking for ‘merger opportunities” in Pakistan,” Sigve Brekke, President and CEO of Telenor Group, stated in November 2022.
Subsequently, in January 2023, PTCL made a stock filing expressing its interest in making a significant investment in Pakistan’s telecom sector, setting the wheels in motion.
PTCL had then announced that its board of directors had authorized the company to explore investment opportunities in Pakistan’s telecom sector.
The combined operations and customer base of Ufone and Telenor Pakistan will ultimately result in the largest cellular operator in Pakistan, dethroning Jazz, which has enjoyed the leadership position in the cellular market of Pakistan for over a decade and a half.
Hatem Bamatraf, President and Group CEO, PTCL & PTML, said, “We are confident that the strategic synergies created by combining forces with Telenor Pakistan will result in enhanced value for our customers and stakeholders as they are the ultimate beneficiaries of this transaction. The combined entity will serve as a best-in-class provider across all domains with better coverage, seamless data experience, massive reach and a wide range of products and services for customers.”
Hatem Dowidar, Group CEO of e&, said, “The strategic acquisition of Telenor Pakistan presents a significant opportunity for market consolidation, empowering us to invest more in creating the best next-generation network in Pakistan. This move reinforces our commitment to the progress of the country’s telecom sector, delivering added value to our customers and shareholders. In shaping a telecom legacy where innovation and connectivity merge to explore future opportunities, we aim to accelerate digital transformation to better serve our customers and community.”
Hassan Nasir Jamy, Chairman PTCL Board, said, “PTCL Group has played a pivotal role in connecting the people of Pakistan. This commitment further solidifies our resolve to build a prosperous and digitally connected nation and to be the national champion to support Pakistan’s digital transformation. This agreement will go a long way in ensuring that we provide our customers with the most efficient and technologically advanced solutions.”
Sigve Brekke, CEO, Telenor Group commented: “Our decision to pursue the sale of our Pakistan operations follows 18 successful years of operations in the country, which started as a greenfield rollout. We are proud of the company Telenor Pakistan is today. It is an efficient and future-ready telco operator, with a strong distribution network and talented team serving 45 million customers. By selling to the country’s largest integrated ICT company, we believe this consolidation move would help strengthen Pakistan’s telecoms sector, creating opportunities in new areas of growth to the benefit of consumers in Pakistan.”
Petter-Børre Furberg, Head of Telenor Asia, added: “We systematically considered all alternatives during the strategic review process and believe that, following a sale, the market will be better served by a strong local champion. Our strategy in Asia is to build number-one positions in the markets we operate, with scale as a pre-requisite for value creation and profitable growth. We thank and acknowledge the commitment of the Telenor Pakistan team and partners, who will continue to serve customers well in the transition. Looking ahead, Telenor Asia will remain an active owner for the three market-leading businesses that make-up our Asian portfolio.”
It won’t be out of place to mention here that the completion of the acquisition is subject to regulatory approvals and customary closing conditions.
PTCL has said that it is actively working towards a smooth transition process to ensure minimal disruption for employees, customers, and other stakeholders.