Etisalat reportedly misses Oct. 28 PCTL payment deadline

Having beaten off challenges from China Mobile and Singapore Telecommunications to the stake in PCTL in June, Etisalat is reported to be facing difficulties in ratifying the deal with deadlines to do so having come and gone.

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By  Tawanda Chihota Published  October 29, 2005

Etisalat’s US$2.598 billion acquisition of a 26% stake in Pakistan Telecommunication Company Limited (PCTL) remains deadlocked more than three months after the UAE operator was announced the winner of the stake, reports suggest. Having beaten off challenges from China Mobile and Singapore Telecommunications to the stake in PCTL in June, Etisalat is reported to be facing difficulties in ratifying the deal with deadlines to do so having come and gone. The original terms of the agreement were set to see Etisalat make a 25% down payment within 14 days of winning the licence and the remaining 75% in 60 days. As such, full payment by Etisalat and the taking over of PTCL management should have been completed by August 28. This did not occur, and following meetings between the Etisalat CEO Mohammad Omran and senior Pakistan government officials, Pakistan agreed to extend the completion period of the deal to October 28. However, it has now been reported that the October 28 deadline has passed without the deal still having been completed, and neither Etisalat nor the Pakistan government has made an official comment at this point. Press reports in Dubai suggest that Etisalat is seeking additional time as it faces “financial problems in submitting the final payment.” Earlier in the process, sources familiar with the transaction were reported as saying the government of Pakistan had allowed Etisalat to pledge its ‘B’ class shares 18 months after the completion of the transaction, instead of the 36 months envisaged in the bid documents in order to accelerate the takeover process. The Pakistan government is also reported to have approved amendments in the shareholding agreement and share price agreement.

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