Emirates Telecommunications Corporation, (Etisalat) failed to pay the balance of its bid amount for 26% of state-owned operator Pakistan Telecommunication Company Limited (PTCL) by the October 28 deadline.
According to a spokesperson of the Privatisation Commission of Pakistan, the matter was being referred to the Privatisation Board and to the Cabinet Committee on Privatisation for their guidance. The spokesperson said that under the June 30, 2005 Share Purchase Agreement signed between Etisalat International Pakistan (EIP) and the government, EIP was required to make the final payment by October 28.
EIP was the highest bidder for the 1.326 billion shares representing 26% ownership of PTCL. They offered US$ 2.598 billion equating US$ 1.96 per share in a transparent and competitive bidding held on June 18 this year.
Some sources say that the privatisation commission may confiscate the 25% of the US$ 2.6 billion first instalment made by Etisalat in case the deal is formally cancelled due to Etisalat's failure to submit the remaining amount by the deadline.
A senior official said Etisalat did not meet the extended deadline despite top-level intervention. He would not say for sure if the deal will not get through in future.
This is the second time that a Middle East investor has faced such a situation during a privatisation transaction. Earlier, Kanooz Al Watan was in an identical situation in during the privatisation of Karachi Electric Supply Corporation.
Source: Pakistan Times - WDR/Intelecon Regulatory News
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