ISLAMABAD, Jan 11: The Privatization Commission is finalising arrangements to dis-invest Pakistan Telecommunication Company Limited (PTCL) as a "single entity" with transfer of 26 per cent management control to a strategic buyer by June 30 this year.
Informed sources told Dawn that an all time high Rs50.30 per share of the PTCL recorded on Tuesday would help complete the transaction by June or perhaps in May 2005 for which Pre-Qualification Committee was likely to be set up in February after the submission of Expressions of Interest (EOIs) by the bidders on 28th of this month.
There had been three international companies from Saudi Arabia, Egypt and Lebanon who have expressed their interest to take part in the privatization of the PTCL. There were reports that four more companies including each from India and Singapore have approached the officials of the Privatisation Commission to also bid for the PTCL.
However, an official source when approached said that a few more companies and consortium have shown interest to purchase 26 per cent strategic shares of the PTCL with management control.
"But unless these new market players formally send their EOIs by January 28, it would not be fair to say that some more companies or groups are interested in the PTCL," he said.
Another source said that once the pre-qualification committee was set up, which was necessary for any mega transaction, it would take three weeks to look into the EOIs after January 28. Later, the committee was likely to take six weeks to pre-qualify the bidding companies in light of their Statement of Qualifications (SOQs)
Then, he pointed out, a data room would be established, which would take another two months to complete the due diligence by going through the financial resources and expertise of the companies and consortiums.
"So we hope to complete the whole transaction by or before June 30 this year, he said. Sources said that the higher authorities believed that PTCL should be sold as an "integrated entity" enabling the new buyer to become a strong regional player.
The authorities were of the view that unbundling of the PTCL would not be cost-effective in terms of time as the company's market share has already reduced from 80 per cent to 51 per cent with the entry of new players in the market, and it would further decrease.
The government has 88 per cent shares of the PTCL and after the sale of 26 per cent shares, the government plans to retain 62 per cent shares in the company. The first PPP government in 1988-89 had sold PTCL's 12 per cent shares and earned over $700 million.
Officials concerned concede that the privatization of the PTCL could not move ahead in the absence of a regulatory regime, which was now very much in place and working effectively under the government's deregulation policy.
PTCL is a leading provider of telephone services to the private sector in Pakistan with over 4.4 million telephone lines in service. Besides providing fixed line and ancillary services, PTCL owns Pakistan Telecommunication Mobile Limited, one of the five GSM cellular providers (two operators yet to start their operations), and Paknet, a country-wide internet service provider.
