Oman Telecommunications Company (Omantel) signed on Monday a Share Purchase Agreement with the existing majority owners of Wordcall Telecom Limited (Worldcall), a Pakistani operator.
Omantel will acquire 60 percent of Wordcall shares from majority owners, and a further 5 percent from other shareholders through the securities market, for a total transaction value of 193 million dollars.
Dr Mohammed bin Ali Al Wohaibi, CEO of Omantel signed the agreement on behalf of Omantel while the agreement was inked by representatives of existing majority shareholders including Salmaan Taseer, amongst others.
Dr Mohammed bin Ali Al Wohaibi, CEO of Omantel termed Omantel's purchase of 60 percent Wordcall shares from the majority owners, as a great milestone for the company in its first investment outside the Sultanate.
Dr Al Wohaibi added that Omantel hopes this investment will be a first of a series of investment in line with its strategy to access and establish foothold in other markets within the region and beyond. Omantel's entry to Pakistani market is important given that it is a fairly developed market with one of the highest population densities in the world. At the same time low penetration in many telecommunications services such as broadband and location specific telephony provides a significant opportunity for growth of telecommunications companies in Pakistani market.
Dr Al Wohaibi stated that Omantel would continue to have a minimum of 51 percent or majority stake in Worldcall even if certain institutions exercise conversion options post the acquisition. These institutions had provided funding to Worlcall and have the option of converting their funds into shares.
Omantel had announced previously that this investment was expected to amount to 204 million dollars. However the devaluation of the Pakistani rupee against the dollar has had a positive impact for Omantel's investment, as the value of the deal at current exchange rate for Pakistani rupee comes to 193 million dollars approximately.
Al Wohaibi pointed out that Omantel's future outlook for Pakistani market is promising due to great investment opportunities and sustained economic development. Analysts are predicting a continued growth for Pakistan as foreign funds persist to monitor and invest in Pakistan which is one of the most attractive emerging economies in the medium to long term.
It is worth noting that Wordcall is licensed to provide diversified telecommunications services across Pakistan. Its revenue amounted to [72 million dollars] for FY 2007-07 and declared a post tax profits of about 10 million dollars. Worldcall is listed on the stock exchanges in Pakistan.
Worldcall holds market leadership position in the broadband retail operations in Pakistan through its extensive metro fibre and hybrid fibre coaxial (HFC) deployments. Worldcall is also a significant international long distance (ILD) and wireless local loop (WLL) operator in Pakistan. Given the current service penetration levels for such services, Worldcall is ideally poised to further enhance and consolidate its market share in these segments of operations.
Omantel acquisition will further strengthen Worldcall by providing an ideal mix of experience and financial resource. With current expansions being focused on high growth segments in telecom and broadband operations, Worldcall revenues are expected to double over the next two years. Enhancement of network and service coverage in highly lucrative markets already serviced by Worldcall, shall further consolidate market positioning in the long term.-PR