Etisalat and Islamabad to complete deal after six year standoff

11 Apr 2012

The Pakistan Telecommunication Company Ltd (PTCL) is close to finalising the transfer of assets owed to it as part of its partial privatisation, local news reports cite PTCL’s CEO as saying. The transfer will bring to a head the long standing dispute between Islamabad and the UAE’s Etisalat, with the latter expected to pay out USD800 million to the government.

As noted by TeleGeography’s GlobalComms Database, in January 2006 the government agreed to sell a 26% share in PTCL to a consortium led by Etisalat for USD2.6 billion. Etisalat would pay in seven staggered intervals, comprising a USD260 million down payment, followed by a further USD1.14 billion paid in March that year, at which point control of PTCL was handed to the UAE group, with the balance of the USD2.6 billion to be paid over five years. Part of the agreement included the transfer of ownership of some 3,000 real estate properties from the government to PTCL. With the government stalling, Etisalat withheld the final payment of USD800 million. The dispute has dragged on with little change to the stand-off, though it was reported in May 2011 that Pakistan’s Interior Minister Rehman Malik had failed to convince Etisalat to make an immediate payment of USD600 million, USD200 million less than was owed, in return for which the Pakistani government would consider writing off the remaining amount.

In the most recent development, the CEO of PTCL announced on 9 April 2012 that the government was close to completing the long-promised asset transfer, with around 100 left to be signed over.

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