Pakistan Telecom Company Limited (PTCL) has entered into financing agreements with an International Finance Corporation (IFC)-led consortium to support its acquisition of Telenor Pakistan and Orion Towers Private Limited.
The agreement, finalized on June 27, 2024, involves a loan of up to $400 million, repayable over seven years with a one-year grace period. The IFC-led consortium includes the Silk Road Fund and British International Investment (BII).
The telecom giant announced this development through a notice to the Pakistan Stock Exchange (PSX) on Friday.
“Further to our letter dated April 08, 2024, whereby it was notified that the Board of Directors of International Finance Corporation (IFC) has approved the debt financing up to $400 million to PTCL for the acquisition of TPL and that the finalization of workstreams to sign financing agreements with IFC is underway and expected to be completed on or before 31st July 2024,” read the notice.
The financing is structured to be disbursed following the fulfillment of conditions precedent specified in the agreements. The loan will be repaid in quarterly installments starting from the second anniversary of the loan.
Commenting on the development, President and Group CEO, of PTCL & Ufone 4G, Hatem Bamatraf said, “We are thrilled to witness the materialization of this financing deal, which brings us closer to concluding this transformative milestone in Pakistan’s telecom sector. We are eager to serve a larger customer base with renewed commitment as soon as the acquisition process concludes following the necessary regulatory approvals.”
The acquisition of Telenor Pakistan is part of PTCL’s strategic expansion. PTCL had previously signed a Share Purchase Agreement (SPA) to acquire 100% of Telenor Pakistan’s shares, based on an enterprise value of Rs108 billion. This acquisition, structured on a cash-free, debt-free basis, will be funded through the external debt raised by PTCL.
Telenor Pakistan, a leading mobile operator with 45 million subscribers, reported a revenue of Rs112 billion and an EBITDA margin of 43% for the twelve months ending September 2023. PTCL’s assets also include Ufone, a mobile operator in Pakistan with over 20 million customers.
The sale of Telenor Pakistan aligns with Telenor Group’s strategy to scale and create market-leading players in Asia, as outlined during its 2022 Capital Markets Day. This transaction concludes the strategic review of Telenor’s operations in Pakistan, initiated in July 2022.