Telenor Seeks Bids For $1bn Pakistan Unit – News

Oslo: Telenor is moving forward with preparations to sell its business in Pakistan, which might be worth approximately $1 billion, according to sources familiar with the subject.

The Norwegian telecommunications provider is collaborating with Citigroup Inc. and will solicit initial offers for the business later this month.  Telenor announced in July that it would conduct a strategic assessment of its Pakistan arm following a $244 million impairment on operations in the growing market.

People anticipate that strategic purchasers from the Middle East and Asia with existing businesses in Pakistan will be interested. They stated that discussions are underway and there is no certainty that they would result in a transaction. Citigroup and Telenor representatives declined to comment.

On Wednesday, shares of Telenor surged as much as 2.4%. The shares rose 1.8% in Oslo, increasing the company’s market capitalization to $13 billion.

In October, Telenor reported a 22 percent decline in underlying profitability in Pakistan for the third quarter. The is due in part to the country’s escalating energy prices. This was counterbalanced by a gain from the repeal of a SIM tax in Pakistan.

The gain of $57.79 million in Pakistan, one of Telenor’s four Asian countries, was attributable to a court judgement regarding the applicability of tax on mobile phone SIM cards from 2014 to 2020.

In order to make way for greater dividends and 5G investments, Telenor, which has 175 million users in eight countries across the Nordic region and Asia, has pushed to reduce expenses and increase its cash flow in recent years. Plans to consolidate markets in South-East Asia, including a $15 billion merger to build a telecoms leader in Malaysia and a $8.6 billion acquisition in Thailand, represent the company’s most significant steps to date.

Telenor Asia manages both divisions, as well as the company’s operations in Bangladesh and Pakistan.

During the first three quarters of 2022, Telenor Pakistan’s income decreased by about 8% in Norwegian Kroner terms but increased by 4% in Pakistani Rupee terms, staying at NOK 3.390 billion (Rs 82.57 billion) as opposed to NOK 4.270 billion (Rs 79.36 billion) over the same period of 2021.

During the third quarter of 2022, Telenor Pakistan reported total revenues of NOK 1.320 billion (Rs 29.53 billion). Compared to NOK 1.425 billion (Rs 26.68 billion) during the same period of the previous year, i.e. 2021. This represents a 7.5 percent decline in NOK terms and a 10 percent increase in rupee.

During the quarter, unexpected flooding negatively impacted the Group’s Pakistani operations. The issue affected consumers’ purchasing power and led to network failures and price increases.

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