Abu Dhabi: Etisalat has said it could withhold payments to Pakistan for failure to transfer some properties under a $2.6 billion (Dh9.56 billion) deal to acquire a stake in Pakistan Telecommunication Company Ltd (PTCL).
"Under the agreed terms of the transaction, etisalat is entitled to withhold payments until the property titles were transferred to PTCL," etisalat Chairman Mohammad Omran said in an emailed statement yesterday. Etisalat aims to ensure that PTCL gets a clean title to the properties, he said.
Provisions
The deal requires the transfer of properties to Pakistan Telecommunication, and not to etisalat, Omran said. The Government of Pakistan owns 62 per cent of PTCL and will be the biggest beneficiary from the transfer of property, he said.
Etisalat agreed in 2006 to buy a 26 per cent stake in Pakistan Telecom, the nation's biggest phone service provider, for $2.6 billion. Etisalat withheld payment of $800 million and the sale of the stake to the UAE phone company by the previous government headed by military ruler Pervez Musharraf government was "unfair," Pakistan Privatisation Minister Waqar Ahmad Khan said on March 31.
Etisalat also said its board of directors had obtained a legal opinion from international and external counsel that all steps for the sale of the asset had been followed and the acquisition was legally valid under Pakistani law.
The sale of the PTCL stake to etisalat "was full of flaws and legal advisers had asked the then government to scrap it," Pakistan's asset sale agency said in a statement March 31. "Otherwise, it would be considered contrary to rules." Privatisation minister Khan requested lawmakers to form a committee to probe the transaction.
- $2.6b amount paid by etisalat for PTCL stake
- 26% etisalat's stakeheld in PTCL
- $800m amount withheldby etisalat
