Saturday, January 02, 2010

Pakistan - Etisalat withholding partial payment over transfer of physical assets

[zawya] Abu Dhabi Etisalat is withholding $799 million (Dh2.9 billion) worth of payments to the Pakistani Government until properties originally part of the company's acquisition of 26 per cent in Pakistan Telecom (Ptcl) are registered in Ptcl's name, Pakistan's Privatisation Commission (PPC) confirmed yesterday.

In an e-mailed statement, a spokesman for PPC said the last payment by etisalat came in September 2007.

He added more than 93 per cent of the properties in question have been registered.

"The prime minister has assured full cooperation and support to the management of Ptcl in relation to all issues pertaining to Ptcl," the PPC said in its statement.

"[This includes] registration of a few properties in the name of Ptcl [which are already in possession of Ptcl]."

Etisalat officials declined to comment beyond a statement released on Tuesday confirming it is in contact with the Pakistani Government to resolve "certain issues and challenges that have impeded the implementation of certain conditions" in the share purchase agreement.

Etisalat Chairman Mohammad Omran could not be reached for comment.

"Transfer of land is part of the contract. It says if it doesn't happen we can stop the payments," Omran told a local daily last month.

"I can tell you the properties are in main cities and very valuable."

In June 2005, etisalat's $2.6 billion (Dh9.5 billion) bid beat those of Singapore Telecom and China mobile for the purchase of a 26 per cen t stake in Ptcl, Pakistan's largest telecoms operator.

Renegotiation of the deal postponed signing until April, 2006 but did not affect etisalat's bid.

The contract stipulated a $1.4 billion (Dh5.1 billion) up-front payment and for the remainder to be paid in six-month installments over 4.5 years. The deal also guaranteed etisalat management rights of Ptcl operations.

Since late 2007, etisalatetisalatLoading... has said it is considering acquiring an additional 25 per cent stake but has not taken action.

Etisalat withholds payment to Pakistan

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