PTCL Secures $400 Million IFC Deal for Telenor Acquisition

In a significant development, PTCL has secured a debt financing deal of up to $400 million from the International Finance Corporation (IFC), the World Bank’s investment arm, to conclude its acquisition of Telenor Pakistan. PTCL stated in a notice to the Pakistan Stock Exchange (PSX):

“It is to inform you that the Board of Directors of the International Finance Corporation (IFC) has approved the debt financing of up to $400 million to PTCL for the acquisition of Telenor Pakistan” 

According to the company, the finalization of workstreams to sign financing agreements with IFC is underway. Moreover, it is anticipated to be completed on or before July 31, 2024. The details of the debt financing will be revealed after the finalization of the financing agreements.

PTCL Share Price Rose After IFC Deal

The PTCL publicized this information through a notice to the Pakistan Stock Exchange (PSX) on Monday under rule 5.6.1 of the Rule Book of the PSX with Section 96 and other enabling provisions of the Securities Act 2015. It is pertinent to mention that PTCL’s share price rose by 83 paisas to Rs17.02 per share after the IFC deal.

Last year, Norway’s Telenor agreed to sell its Pakistan unit to the state group Pakistan Telecommunications in a transaction valuing the unit at 5.3 billion Norwegian crowns. It included repayment of intercompany loans of 3.5 billion Norwegian crowns and decreased interest-bearing liabilities of 1.8 billion Norwegian crowns, including leases. After that, PTCL entered into a Share Purchase Agreement (SPA) with Telenor Pakistan’s shareholders to acquire 100% of the shares on a cash-free, debt-free basis. At that time, PTCL announced that external debt would finance the acquisition.

The Norwegian group has been revamping its Asian businesses. It is building bigger units in Thailand and Malaysia via local mergers. Moreover, it has decided on the divestment of its telecom operations in Pakistan. Telenor’s acquisition by PTCL is one of the most significant deals in Pakistan despite its economic challenges.