By Staff Reporter
KARACHI: Norway’s Telenor Group said on Thursday it had agreed to sell its Pakistan telecoms business to Pakistan Telecommunications Company Ltd (PTCL) for 5.3 billion Norwegian crowns ($500 million) as part of its strategy to focus on core Asian markets.
The deal, which includes repayment of intercompany loans and reduced debt, values Telenor Pakistan at 11.7 times its 2022 earnings before interest, tax, depreciation and amortization (EBITDA), Telenor said in a statement.
“The transaction values Telenor Pakistan at NOK 5.3 billion on a cash-and-debt-free basis. This includes repayment of intercompany loans of NOK 3.5 billion and reduced interest-bearing liabilities of NOK 1.8 billion, including leases.”
Telenor Pakistan, which started operations in 2005, is the country’s second-largest mobile operator with 45 million customers and a 28 percent market share. It competes with Jazz, Zong and Ufone, which is owned by PTCL.
PTCL, which is 62 percent owned by technology and investment group E&K, is Pakistan’s largest integrated information and communications technology (ICT) company, offering fixed-line, broadband, mobile and digital services.
The transaction is subject to regulatory approvals and is expected to close in 2024, Telenor said.
Telenor said the sale was part of its strategy to build scale and market-leading positions in Asia, where it operates in Bangladesh, Malaysia and Thailand.
“Our decision to pursue the sale of our Pakistan operations follows 18 successful years of operations in the country, which started as a greenfield rollout,” Telenor Group CEO Sigve Brekke said in a statement.
“By selling to the country’s largest integrated ICT company, we believe this consolidation move would help strengthen Pakistan’s telecoms sector, creating opportunities in new areas of growth to the benefit of consumers in Pakistan.”
Petter-Børre Furberg, head of Telenor Asia, said the sale would create a strong local champion that would serve the market better.
“Looking ahead, Telenor Asia will remain an active owner for the three market-leading businesses which make-up our Asian portfolio,” he said.
Telenor Pakistan will continue its business as usual and focus on delivering services to its 45 million customers, the company said.
PTCL’s major assets include Ufone, a mobile operator in Pakistan with over 20 million customers. The acquisition will create synergies that will drive innovation and bolster their market, allowing them to reach a broader customer base and accelerate their digital transformation journey, PTCL said.
PTCL Chief Executive Officer Hatem Bamatraf commended the agreement and expressed his confidence in the acquisition, stating it will enhance service and delivery to their customer base with “better coverage, seamless data experience, massive reach and a wide range of products and services for customers.”
Hatem Dowidar, chief executive of the E&K group, highlighted that this action provided an important opportunity for market consolidation, and allows for investment in next-generation network in the country, cementing their position to explore future opportunities.
Mohammed Sohail, chief executive of Topline Securities, said this acquisition is “one of the biggest acquisition deals in Pakistan despite its economic challenges.”
Telenor had been signalling its intentions to exit Pakistan. In November 2022, media reported that the Norwegian company was searching for a buyer to sell its Pakistani operations to.
The statement further added that the Etisalat-owned company was “actively working towards a smooth transition process to ensure minimal disruption for employees, customers, and other stakeholders.”
Copyright © 2021 Independent Pakistan | All rights reserved
