In a major consolidation of the telecom sector, Pakistan Telecommunication Company Limited (PTCL) has entered into a Share Purchase Agreement (SPA) with the shareholders of Telenor Pakistan (Private) Limited (TPL) for the acquisition of 100% shares for Rs108 billion ($385 million).
PTCL shared the development in its notice to the Pakistan Stock Exchange on Thursday, putting to rest reports around Telenor Pakistan’s future in the country that had been the subject of much debate over the past year.
“Further to our letter dated August 29, 2023, whereby the Board of Directors (BoD) of PTCL had authorized the company to offer a binding offer to the target company.
“In view of the above, this is to notify your good office(s) that consequent to the approval of the BoD of the company, it has entered into a Share Purchase Agreement (SPA) with the shareholders of TPL for the acquisition of 100% shares of TPL, based on an Enterprise Value of Rs108 billion on a cash free, debt-free basis,” read the notice.
The transaction will also improve the capabilities of the combined entities and result in improved coverage and quality of services to customers and enable wider access to communication solutions for businesses while supporting economic growth of Pakistan: PTCL
It shared that the transaction will be financed by external debt that will be raised by the company.
PTC’s share price already hit the upper limit on Thursday, with over 1.76 million shares changing hands. It was priced at Rs13.01 at the time of this report.
Telenor Pakistan is a mobile operator serving nearly 45 million subscribers with reported revenue of Rs112 billion based on last twelve months (LTM) September 2023 financial reporting.
PTCL’s major assets include Ufone, a mobile operator in Pakistan with over 20 million customers. Etisalat, with a significant minority stake, runs it under an agreement with the government of Pakistan, which has the majority stake.
“The transaction provides an opportunity for in-market consolidation in the telecom market which will predominantly lead to an improved long-term outlook of the telecom sector,” PTCL said in a statement.
“The transaction will also improve the capabilities of the combined entities and result in improved coverage and quality of services to customers and enable wider access to communication solutions for businesses while supporting economic growth of Pakistan,” read the notice.
The telecom giant added that the transaction will further strengthen the position of PTCL Group as a leading operator in mobile, fixed and micro-financing serving more than 70 million customers, upon completion of the transaction.
