Pakistan on Thursday requested that Etisalat International take prompt action to clear unpaid sale proceeds of Pakistan Telecommunication Company Limited (PTCL) and participate in future investment possibilities in the country, notably in the IT and telecom industries. For almost 16 years, Etisalat has been holding back $800 million of the $2.6 billion bid proceeds for majority interests in PTCL on the grounds that Pakistan did not transfer titles to all of the privatised entity’s facilities. Shaukat Tarin, Minister of Finance, met with Hatem Dowidar, CEO of Etisalat International Group, in his ministry. Mohammadmian Soomro, the Minister for Privatisation, the Chairman of the Privatisation Commission, the Finance Secretary, and other top officials were also present.
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According to an official statement, Mr Tarin “understood the importance of resolving unresolved concerns between Etisalat and the Privatisation Commission and moving forward towards a permanent solution.” “A fair assessment of properties should be performed as soon as possible,” the minister stated. Mr Tarin informed the visiting team that he would now devote his complete attention to the telecom sector, including new deals and foreign direct investments in IT and 5G services. He emphasised the opportunities for foreign investment in Pakistan, particularly in the rapidly rising IT and telecom sectors. Etisalat, he predicted, will gain from the favourable environment and enticing incentives.
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According to sources, Etisalat proposed some valuation numbers for the outstanding properties, which were calculated at the current market price without taking into consideration the $800 million in financing charges for the 16-year outstanding sums. The same principle must apply to properties and foreign exchange proceeds, according to the official statement, which also stated that the two parties agreed to finish the fair value of properties within a month. Mr Dowidar underlined that property evaluations will be completed shortly, and he expressed his willingness to continue investing in Pakistan’s IT and telecom sectors. “Both sides decided to go forward in a spirit of goodwill to resolve any outstanding concerns between Etisalat and the Privatisation Commission,” the finance ministry said in a statement.
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Mr Tarin concluded that the United Arab Emirates was one of Pakistan’s biggest economic partners, and that Islamabad valued the two countries’ brotherly relations and wished to enhance business and trade ties even more. According to sources, Etisalat offered roughly $275 million in exchange for $800 million in revenues from the sale of PTCL about 18 months ago, but the problem could not be resolved. Pakistan had earlier requested that Etisalat deduct around Rs9 billion ($60 million) from the total $800 million. Etisalat has made a final counter offer of no greater than $275 million after extensive discussions. Since the takeover, the firm is projected to have made almost Rs100 billion in profit.
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Despite winning a 26% stake and management control of the then-telecom monopoly for $2.6 billion in June 2005, Etisalat has kept $800 million in PTCL sale revenues. The issue between the Pakistani government and Etisalat had boiled down to 33 properties whose titles could not be transferred in PTCL’s name. The selling deal stipulated that any property disputes be resolved by both parties valuing their assets. In the event of a disagreement about valuation, the deed gives preference to Etisalat’s valuation, unless the subject is addressed to arbitration. After expiring in 2011 and being updated till 2014, PTCL’s technical services agreement (TSA) with Etisalat likewise had no legal life. The PTCL’s asset management department had initially submitted false and fundamentally faulty information on its assets, claiming to hold just 3,248 yet mentioning 3,384 in the privatisation deal signed in 2006.
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The government, which still has a 62 percent ownership in the PTCL, has provided Etisalat with a list of all 3,248 properties as well as information on why the remaining 33 properties were not transferred to the PTCL. Etisalat had paid $1.4 billion in instalments up front, but the remaining $800 million was halted due to the non-transfer of all properties in the name of PTCL. Based on a list furnished by the PTCL’s asset management department as part of the sale-purchase agreement, Etisalat claims there were 363 non-doable properties, not 33. Because the properties were either partially owned, rented out, held by the provinces but inhabited by the federal government, or not owned by the PTCL in the first place, they could not be transferred in the name of PTCL. Some of these properties, such as a large portion of Gizri, are unrecoverable.

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