PTCL acquires Pakistan’s major telecom firm for Rs108bn

ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) has signed a Share Purchase Agreement (SPA) with the shareholders of Telenor Pakistan to buy 100% of TPL’s shares, based on an enterprise value of Rs108 billion.

According to PTCL’s filing on the Pakistan Stock Exchange on Thursday, the deal will be done on a cash-free, debt-free basis and PTCL will fund the acquisition through external debt that it will raise.

Telenor Pakistan is a leading mobile operator serving 45 million subscribers with reported revenue of Rs112 billion and EBITDA margin of 43% based on the last twelve months (LTM) September 2023 financial reporting.

The transaction will enable in-market consolidation in the telecom sector, which will improve the long-term outlook of the industry.

PTCL’s major assets include Ufone, a mobile operator in Pakistan with over 20 million customers.

Telenor Group said in a press release that the sale is part of its strategy to build scale and market-leading players in Asia, as presented at the 2022 Capital Markets Day. It concludes the strategic review of the telco operations in Pakistan, which was announced in July 2022.

The remaining Telenor Asia portfolio consists of market-leading operators Grameenphone in Bangladesh, CelcomDigi in Malaysia and True Corporation in Thailand, with close to 160 million customers.

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.

Chief Executive Officer (CEO) Telenor Group Sigve Brekke said, “We decided to sell our Pakistan operations after 18 successful years of operations in the country, which started as a greenfield rollout. We are proud of the company Telenor Pakistan is today. It is an efficient and future-ready telco operator, with a strong distribution network and talented team serving 45 million customers.”

“By selling to the country’s largest integrated ICT company, we believe this consolidation move will help strengthen Pakistan’s telecoms sector, creating opportunities in new areas of growth to the benefit of consumers in Pakistan,” he added

Petter-Børre Furberg, Head of Telenor Asia, said, “We carefully considered all alternatives during the strategic review process and believe that, after a sale, the market will be better served by a strong local champion.

Our strategy in Asia is to build number one positions in the markets we operate, with scale as a pre-requisite for value creation and profitable growth. We thank and acknowledge the commitment of the Telenor Pakistan team and partners, who will continue to serve customers well in the transition. Looking ahead, Telenor Asia will remain an active owner for the three market-leading businesses that make up our Asian portfolio.”

Telenor Pakistan will continue its business as usual and focus on delivering services to its 45 million customers. The agreement is subject to regulatory approvals and other customary terms and conditions. The transaction is expected to be completed during 2024, the statement added.