DUBAI, Oct 22: The $2.598 billion privatization deal in Pakistan between the Emirates Telecommunications Corporation (Etisalat) and the PTCL is reportedly not out of troubled waters as, according to sources here, the ‘issues’ are still being sorted out.

The local media has reported that the government, which accommodated Etisalat’s earlier demands, has now rejected its new requests for credit facility from a Pakistani bank and more voting rights in the Pakistan Telecommunication Company Limited board.

Dubai-based Etisalat, after successfully bidding for 26 per cent PTCL shares, was to make full payment and take over the public telecom company by August 28, a deadline that was extended for two months after a deal between both parties.

According to reports, both Etisalat and the government are optimist that the deal will go through without any further delay.

“Etisalat’s executives are still working with the Privatization Commission to settle the issues within the extended deadline,” Khaleej Times quoted an unnamed source as saying.

The newspaper has also reported PTCL claims that there are no pending issues.

“The PTCL is ready to pass on the management control to the successful bidder as it has no pending issue with Etisalat,” PTCL President Junaid I. Khan told the paper. “At present, Etisalat executives are in touch with the Privatization Commission to settle the deal,” he added.

Mr Khan declined to say what issues were yet to be settled when deadline was less than a week away.

The analysts in Dubai believe that Etisalaat has overbided and will face a tough competition due to the deregulated environment that has brought down the PTCL tax profit from Rs29.16 billion in 2,004 to Rs26.5 billion in 2,005.

“Market price of the PTCL shares is hovering around Rs65 per share as against Etisalat’s bid price of Rs117 per share,” the sources were quoted as saying.

It is also reported that the government has conceded a couple of concessions to Dubai’s telecom giant, allowing it to pledge its ‘B’ class shares 18 months after the deal is concluded, instead of 36 months, and has approved amendments to the share holding and share pricing agreements.

“The government is keen that the deal goes through and it is very much optimistic that the issues will be sorted out during this period,” Khaleej Times quoted a senior government official as saying.

“The entire privatization process will be derailed in case both the parties fail to settle the issues,” he added.