Pakistan’s government has settled a long-running spat with Etisalat that arose following the UAE-based group’s purchase of a minority stake in PTCL (Pakistan Telecommunication Company Limited).
The dispute relates to the valuation of various properties that were set to become part of PTCL following its privatization in 2006. Etisalat CEO Hatem Dowidar agreed to pay US$2.6 billion for a 26% stake in PTCL, of which US$1.8 billion was paid upfront.
Etisalat agreed at the time to pay the balance in installments across the next five years, on the basis that over 3000 properties would be folded into PTCL. However, when it became apparent that the government had failed to implement part of this agreement, Etisalat refused to pay the remaining balance.
By 2015, most of the firms had been transferred to PTCL but around 30 remained incomplete as the government was prevented from doing so by legal conditions. In some instances, properties were owned by private investors and should never have been promised under the original agreement.
CommsUpdate reports that to resolve the situation, the Pakistani government has agreed to deduct the value of these properties from the US$800 million that Etisalat now owns. All that remains is for the parties to agree on a fair valuation of these properties.
To this end, the finance ministry has proposed a mutually agreed process overseen by “internationally renowned evaluation companies”. Etisalat’s CEO has reportedly agreed to this proposal, which could see the evaluation completed within “a couple of months”.