$563mn deal: Engro Corp to acquire mobile phone towers from Jazz

Engro Corporation, one of the leading conglomerates in Pakistan, has announced to acquire a mobile phone towers network from Pakistan Mobile Communications Limited (PMCL/Jazz) at a price of $563 million, Business Recorder learnt on Friday.

The transaction has developed partnership between the two firms to improve the towers management at a reduced cost and offer better services to mobile phone users.

In a notification to the Pakistan Stock Exchange (PSX) on Friday, Engro Corporation reported its subsidiary Engro Connect had acquired PMCL’s towers from its subsidiary Deodar (Private) Limited.

“Engro will guarantee the repayment of Deodar’s debt of $375 million (PKR equivalent) and provide PMCL with an additional amount of $187.7 million (PKR equivalent),” Engro said.

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The arrangement remains subject to corporate and regulatory approvals and sanction of the scheme by the Honorable High Court, it added.

With this backdrop, Engro’s share price jumped 9.17% (or Rs34.24), rising to a new all-time high closing price at Rs407.54 with 5.62 million share turnover at the PSX in the day.

An Engro official told Business Recorder that they would upgrade the acquired towers into shared towers, meaning other mobile network operators (MNOs) would also use the towers network to offer services to their respective customers.

There are currently three major mobile network operators in Pakistan including Jazz/Warid, Ufone/Telenor, and Zong. In past, Jazz acquired Warid and Ufone bought Telenor.

Hussain Dawood, Chairman, Engro Corporation, said in a press statement, “This partnership is transformative for both Engro and Pakistan’s telecommunications landscape”.

“By expanding our tower-sharing network, we’re helping MNOs deliver essential services at reduced costs, ultimately empowering communities with better and more affordable connectivity. Our longstanding relationship with VEON’s Jazz is strengthened through this collaboration, reinforcing our shared vision of a digitally inclusive Pakistan,” he added.

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Topline Securities said in a commentary the mobile phone towers transaction took at a total enterprise value at $563 million including the guaranteed repayment of debt of $375 million and an additional payment of almost $188 million.

VEON Group, Jazz’s parent company, also confirmed the enterprise value of $563 million in a statement.

Deodar has a total tower count of 10,500, translating into per tower price of $53,590, according to Topline.

Engro’s existing tower count under Engro Enfrashare is 4,063 with asset base of Rs69 billion or $250 million, translating into per tower asset value of $61,545, it said.

Engro added in the press statement that it entered the telecommunication infrastructure sector in 2018 and provides essential infrastructure to all mobile network operators (MNOs) in Pakistan.

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“This partnership is designed to benefit the broader telecom ecosystem – by utilising Engro’s infrastructure, MNOs will reduce capital and operational expenditures, allowing them to focus on delivering enhanced services and expanding coverage,” the statement read.

“This cost efficiency will enable operators to reach underserved areas, improving connectivity for millions of Pakistanis and supporting the nation’s digital transformation.”