The Pakistani government and UAE-based Etisalat Group have agreed to resolve a long-standing dispute regarding the latter’s acquisition of a minority stake and management control of Pakistan Telecommunication Company Limited (PTCL). According to a statement from the Ministry of Finance, Etisalat CEO Hatem Dowidar agreed to a proposal regarding the valuation of certain properties that were due to be transferred to PTCL under the 2006 privatisation agreement.
As noted by TeleGeography’s GlobalComms Database, Etisalat purchased its 26% stake in PTCL and agreed to pay USD2.6 billion for the company, including around USD1.8 billion up front with the rest to be paid in instalments over a five-year period. Etisalat refused to pay the outstanding funds on the basis that the government had not adhered to part of the privatisation agreement, under which more than 3,000 properties would be transferred to PTCL. By 2015 the government had completed the transfer of the majority of these properties, with the remaining transfers – around 30 – deemed impossible due to legal impediments. In some cases, for example, the properties were held by private parties and should not have been included in the initial agreement. As such, the value of the outstanding properties will be deducted from the remaining USD800 million owed by Etisalat. However, the two parties have failed to reach an agreement on the fair valuation of the properties.
Under the finance ministry’s proposal – to which Etisalat’s CEO has reportedly acceded – the parties would establish a mechanism for the assessment of the disputed properties by unnamed ‘internationally renowned evaluation companies’. According to the statement from the government, the Etisalat official stated that evaluation of the properties could be completed in ‘a couple of months’.