KARACHI, Sept 9: A consortium of commercial banks and a security house signed on Tuesday to arrange Rs2.5 billion privately placed term finance certificate (PPTFC) for Pakistan Mobile Communications (Pvt) Ltd.

The PPTFC has been subscribed by 39 investors including leasing companies, financial institutions, pension funds, mutual funds and commercial banks. It has been structured as a five-year instrument with repayments to investors through a cash collection mechanism spanning 32 locations, routed through United Bank, the collection bank for the issue.

Those who attended signing ceremony for PPTFC included heads of participating banks, Naveed A. Khan, country representative ABN-Amro, Amar Zafar Khan, president UBL, Zouhair Khaliq, CEO, Mobilink and Ali Siddiqui, director, Jahangir Siddiqui and Co.

Briefing the newsmen after the ceremony, the participants said the PPTFC has been issued on floating interest rate and would give a return of about six per cent. Repayment is on six monthly instalments.

A participant told Dawn that the company opted for a private placement because the Mobile Communications is a private limited firm and not listed on the stock exchange. The TFCs were arranged after a credit rating by PACRA and approval by the SECP. The company was saved from the hassle of getting listed and issuing a prospectus. The arrangement suited the banks because they would unload at least some of their share of TFC issue to other financial institutions, spread the risk and generate cash flows for more financing.

The Rs2.5 billion mobilised through the TFCs would be used as a part of the company’s $180 million investment in fresh infrastructure including network coverage and subscriber capacity for better call connectivity and superior grade of service, new call centres and better centres for enhanced customer services and introduction of cutting edge value-added services to cater to the demands in both the metropolitan and small cities, says a press release.