Etisalat will likely withhold its fifth payment in a row, due on March 31st, 2010, to the Pakistani Government for the acquisition of a 26 per cent in Pakistan Telecom (PTCL) as a dispute over the transfer of properties to PTCL remains unresolved, reported Gulf News, quoting Mohammad Omran, Chairman Etisalat.
“Until now, the government [of Pakistan] has not released a list of properties to be converted [to PTCL ownership],When the list is released, the money will be paid”, said Chairman Etisalat in an interview with Gulf Times.
Etisalat is withholding $799 million worth of payments to the Pakistani Government until properties originally part of the company’s 2006 acquisition in PTCL are registered in PTCL’s name.
In an emailed statement, Pakistan’s Ministry of Privatisation said Etisalat’s next payment is due March 31. Of the 311 properties in question, 118 are already in the possession of PTCL and 17 properties are “under some litigation”. The government is now working to appraise the properties, the statement said.
“We have already approached provincial governments to put value to the properties in their respective provinces,” said Shahab Khawaja, federal secretary at MOP. “Final valuation has not been conveyed. As soon as we get it, [the] same will be conveyed to Etisalat and PTCL.”
In June 2005, etisalat’s $2.6 billion bid beat those of Singapore Telecom and China mobile for the purchase of a 26 per cent stake in PTCL, Pakistan’s telecom operator.
Renegotiation of the deal postponed signing until April, 2006 but did not affect etisalat’s bid. The contract stipulated a $1.4 billion up-front payment and for the remainder to be paid in six-month instalments over 4.5 years. The deal also guaranteed etisalat management rights of PTCL operations.
Since late 2007, etisalat has said it is considering acquiring an additional 25 per cent stake but has not taken action.
Via Gulf News