The Privatisation Commission (PC) has reduced the time from 36 months to 18 months in case of Etisalat to pledge 26 percent PTCL 'B' class shares for raising necessary funds, a relaxation which was refused to other bidders during the due diligence phase, it is learnt.
Sources told Business Recorder that when the issue of PTCL privatisation was placed before the Cabinet Committee on Privatisation (CCoP) for discussion in its meeting on September 1, it was told that EIP had repeated its request for allowing to pledge its 'B' class shares 18 months after completion of the transaction, instead of 36 months stipulated in the bid documents, to enable it to arrange necessary financing.
The representatives of PC admitted that other bidders had also asked for similar ability to pledge during due diligence, but their suggestions were not entertained, sources added.
In response to another query, PC clarified that at the time of formulation of bid documents the global telecom sector was undergoing structural changes. There were other large acquisition transactions in the sector available to international bidders and in order to attract qualitative bidders it was deemed appropriate that there should be some period of restriction on the ability to pledge the shares to raise financing, sources added.
According to sources, PC further said that the bid of EIP, which is a reputable consortium, had outstripped all other bids. Moreover, giving the EIP the ability to pledge its shares would have no financial impact on the GoP, as it would have got the full consideration upfront. Further, it would not impact the GoP's strategic interests, as there were sufficient safeguards available to mitigate any potential adverse effects as a result of pledging of 'B' class shares.
However, after detailed discussion, the CCoP approved amendments in the Shareholding Agreement (SHA) and SPA, as recommended by Financial Advisory consortium were approved by the Board.
It may be mentioned here that the CCoP has allowed PC to offload 8.5 percent 'A' class shares, but refused to give matching rights to Etisalat, which the company demanded to enhance its voting powers.
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