Etisalat and PTCL sign payment deal

The UAE incumbent has put pen to paper on the final agreement that will see it take 26% of Pakistan's main operator, ending months of discussions.

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By  Alex Ritman Published  March 12, 2006

Etisalat has finally announced that it has signed an agreement for the purchase of a 26% stake in Pakistan Telecommunication Company Limited (PTCL), ending months of talks that almost saw the deal collapse. Attending the final signing held at the Pakistani Parliament were Pakistan’s Prime Minister, Shaukat Aziz, and Etisalat’s chairman and CEO, Mohammed Hassan Omran. The final amount of US$2.6 billion, which was bid in July 2005, will be paid through Etisalat International Pakistan (EIP). Etisalat owns 90% of EIP, with Dubai Islamic Bank owning the remaining 10%. Within one month, Etisalat is due to pay US$1.4 billion, with the remaining US$1.2 billion to be paid in equal installments over four and a half years, with payments due every six months. The 26% stake gives Etisalat management control over PTCL, which will be taken by EIP following the handover of the first payment. Having won the bid in June 2005, Etisalat agreed to make a 25% down payment, with the remaining 75% to be paid by August 28. This deadline was subsequently moved to October 28, but was passed without payment. Emergency meetings were held in both Pakistan and Dubai involving the Pakistani prime minister and senior Etisalat officials. Speaking to CommsMEA earlier in the year, Omran said the deal had been a complex one. “There were certain milestones that needed to be met by us and by them. The first time round, we were not able to finish certain things within the timeline that was originally set. We discussed with them a way forward. We came up with revised terms for the deal and this has taken quite a lot of time to discuss with the government of Pakistan in order to find the right, win-win solution for both Pakistan as well as for Etisalat."

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