IFC Approves Financing for PTCL To Acquire Telenor

Staff Report

The Board of Directors of the International Finance Corporation (IFC) has approved financing for PTCL to acquire Telenor Pakistan.

This is following the decision of PTCL Group’s signing of a share purchase agreement with Telenor Pakistan. PTL had signed an agreement to acquire a 100 percent stake in the company on a cash-free, debt-free basis.

PTCL has been negotiating with IFC, which is a member of the World Bank Group to obtain financing to materialize the deal.

The approval of financing by the International Finance Corporation (IFC) has a symbolic value as it not only signifies renewed trust in Pakistan’s economy but also shows the immense potential of the country’s telecom sector.PTCL’s loss jumped to Rs. 14 billion in 2023

Moreover, it shows the confidence of the international body in the PTCL Group’s capabilities as a leading facilitator in realizing the ‘Digital Pakistan Vision.’

Pakistan Telecommunication Company Limited (“PTCL”), part of e& Group (e&), had announced in December last year regarding signing a Share Purchase Agreement with Telenor Pakistan B.V. (Telenor).

It had signed an agreement to acquire a 100% stake in Telenor Pakistan (Pvt) Ltd (Telenor Pakistan) based on an Enterprise Value of PKR 108 Billion on a cash-free, debt-free basis.

Experts in the Telecom industry were of the view that Telenor’s acquisition was not good news for new investors who wanted to enter Pakistan.

The inconsistent policies especially relating to taxes in the telecom sector had forced Telecom to quit Pakistan.

The fee for license renewal has been a key issue for the telecom industry. The government of Pakistan had been charging license renewal fees in dollars whereas telecom players wanted to link renewal fees with Pak rupee.

Even three key players Jazz, Telenor, and Zong had not participated in the spectrum auction held by the PTI government in 2021 due to unfavourable policies.

Even, Ufone had warned the government to ease policies before the auction but nothing happened.

There were reports at that time that Ufone was the only company that had participated in the auction as the government of Pakistan had forced shareholders.

So, there were a host of issues that forced Telecom to quit Pakistan.