PTCL gets $400 million financing for Telenor acquisition

WEB DESK: Pakistan Telecommunication Company Limited (PTCL) has secured up to $400 million in debt financing from the International Finance Corporation (IFC), a member of the World Bank, to fund the acquisition of Telenor Pakistan and Orion Towers (Private) Limited (TPL).

This significant development was announced in a notice to the Pakistan Stock Exchange (PSX) on Friday.

According to the notice, the IFC Board of Directors had approved the debt financing for PTCL on April 8, 2024. PTCL is now in the final stages of completing the necessary workstreams to sign the financing agreements with IFC, with the process expected to be finalised by July 31, 2024.

The company stated that detailed terms of the debt financing would be disclosed once the agreements are finalised.

PTCL has entered into a seven-year financing agreement, including a one-year grace period, with an IFC-led consortium that includes the Silk Road Fund (SRF) and British International Investment (BII).

This agreement, signed on June 27, 2024, is intended to finance the acquisitions of Telenor Pakistan and Orion Towers. The loan of up to $400 million will be repaid in quarterly instalments starting from the second anniversary of the loan.

According to Business Recorder, the disbursement of the financing will occur after the completion of specific conditions outlined in the financing agreements.

Hatem Bamatraf, President and Group CEO of PTCL and Ufone 4G, expressed enthusiasm about the deal, stating, “We are thrilled to witness the materialisation 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.”

Last year, PTCL signed a Share Purchase Agreement (SPA) with Telenor Pakistan’s shareholders to acquire 100 per cent of the shares for Rs108 billion ($385 million) on a cash-free, debt-free basis. At that time, PTCL indicated that the acquisition would be financed through external debt.

PTCL highlighted that this transaction offers an opportunity for in-market consolidation in the telecom sector, promising an improved long-term outlook for the industry.

The acquisition is expected to enhance the capabilities of the combined entities, resulting in better coverage and quality of services for customers, and enabling broader access to communication solutions for businesses, thus supporting Pakistan’s economic growth.

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