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Looks like Zardari government is ready to take extreme measures. The consequences of such an action and the message it will send to other operators will be colossal. <BR> <BR> <BR>Cheers!<BR> <BR>Arzak<br> <BR><div><div id="SkyDrivePlaceholder"></div>> Date: Thu, 19 Apr 2012 16:18:29 +0200<br>> From: fouadbajwa@gmail.com<br>> To: ca@cafonso.ca<br>> CC: governance@lists.igcaucus.org<br>> Subject: Re: [governance] Pakistan to Takeover PTCL if Etisalat Fails to Pay $800 Million till June 2012<br>> <br>> Its gonna be crazy i tell you :) Some actions have far longer<br>> implications. Its a setback attempt similar to many other cases<br>> popping up. Trying to repay IMF loans without fulfilling commitments<br>> doesn't really give any better results.<br>> <br>> -- Foo<br>> <br>> On Thu, Apr 19, 2012 at 4:14 PM, Carlos A. Afonso <ca@cafonso.ca> wrote:<br>> > ... and the sky will fall on Pakistan if they do this, like it fell on<br>> > Argentina for taking over parasitic Repsol's majority stake in YPF.<br>> ><br>> > frt rgds<br>> ><br>> > --c.a.<br>> ><br>> > On 04/19/2012 10:44 AM, Fouad Bajwa wrote:<br>> >> http://dawn.com/2012/04/09/pakistan-warns-etisalat-to-pay-800-million-or-face-hostile-takeover/<br>> >><br>> >> Pakistan warns Etisalat to pay $800 million or face hostile takeover<br>> >><br>> >> ISLAMABAD, April 8: Facing a serious financial crunch and fed up with<br>> >> Etisalat’s inflexibility in paying over $800 million in PTCL sale<br>> >> proceeds, Pakistan has asked the UAE-based firm to clear its dues<br>> >> before June this year or face hostile takeover of the country’s<br>> >> telecom giant by the government.<br>> >><br>> >> Sources told Dawn that the stern warning was conveyed a few days ago<br>> >> to a high-level Etisalat delegation visiting Pakistan. The delegation<br>> >> met a government team led by Finance Minister Dr Abdul Hafeez Shaikh.<br>> >><br>> >> The Etisalat delegation’s request for a meeting with Prime Minister<br>> >> Yousuf Raza Gilani was turned down pending resolution of the dispute,<br>> >> the sources said.<br>> >><br>> >> Keeping in mind Pakistan’s friendly relations with the UAE, the<br>> >> Dubai-based majority owner and operator of the country’s largest<br>> >> telecom firm has been told that it may keep a maximum of $150 million<br>> >> — more than double the value of a couple of problematic properties —<br>> >> but release the rest of the amount (slightly over $650 million)<br>> >> upfront.<br>> >><br>> >> Etisalat has held back $800 million in PTCL sale proceeds for well<br>> >> over five years now, although it won 26 per cent shareholding along<br>> >> with management control of the-then telecom monopoly for $2.6 billion<br>> >> in June 2005.<br>> >><br>> >> The Etisalat has been given a month to respond positively to the offer<br>> >> “because the true value of the money for Pakistan is in May” because<br>> >> Islamabad has to make a repayment of about $800 million to the<br>> >> International Monetary Fund. Non-payment will adversely affect foreign<br>> >> exchange reserves and impact Pakistan’s exchange rate negatively. The<br>> >> economic managers have been showing $800 million PTCL proceeds in<br>> >> their budget documents as financing items to bridge fiscal deficit<br>> >> that is expected this year to cross a whopping 7.5 per cent of the GDP<br>> >> owing to uncertainty over PTCL dues, auction of 3G telecom licences<br>> >> and disbursements under the Coalition Support Fund from the United<br>> >> States.<br>> >><br>> >> “Enough is enough” was the message conveyed to the Etisalat delegation<br>> >> in the presence of Finance Minister Shaikh.<br>> >><br>> >> “If we do not hear a positive response in a month, we shall make sure<br>> >> your flight does not land in Pakistan,” a furious participant was<br>> >> quoted to have told the guests. Moreover, the Etisalat would be banned<br>> >> from bidding in 3G telecom licences auction due in a couple of months<br>> >> to raise about $1 billion.<br>> >><br>> >> Prime Minister’s Principal Secretary Khushnood Lashari and Finance<br>> >> Secretary Abdul Wajid Rana who is also a government member on the PTCL<br>> >> board of directors were among those who attended the meeting. The<br>> >> strong position taken at the meeting, said the sources, had the full<br>> >> backing of the president and the prime minister.<br>> >><br>> >> The Etisalat’s top executive, the sources said, suggested appointing<br>> >> an independent auditor for the valuation of three properties and asked<br>> >> the government side to wait till its conclusion but this was rejected<br>> >> outright.<br>> >><br>> >> The sources said the finance minister told the delegation Islamabad<br>> >> was not asking for a mark-up on $800 million the Etisalat utilised for<br>> >> more than five years now but that it was unjustified to hold back such<br>> >> a big amount against three properties having a total value of less<br>> >> than $70 million. The properties are under the control of PTCL, but<br>> >> their titles cannot be transferred in the name of PTCL owing to legal<br>> >> complications.<br>> >><br>> >> Moreover, Pakistan has never disputed transferring property titles in<br>> >> the name of PTCL and was earnestly making efforts to overcome legal<br>> >> complications.<br>> >><br>> >> “They are ‘worthy foreign investors’ and some of us are overawed but<br>> >> this cannot go on indefinitely to the extent of compromising<br>> >> sovereignty,” a participant of the meeting said, adding that nobody<br>> >> ever talked about the non-payment issue with Etisalat as was taken up<br>> >> a week ago.<br>> >><br>> >> The unusual stern warning of an extreme threat came following a lot of<br>> >> top level persuasions from Pakistan for the recovery of PTCL dues over<br>> >> the last two years. The government had sold about 26 per cent shares<br>> >> along with management control of Pakistan’s largest telecom operator<br>> >> in June 2005 when Dr Abdul Hafeez Shaikh was privatisation minister in<br>> >> the Musharraf government.<br>> >><br>> >> Soon after becoming the finance minister in the PPP government, Mr<br>> >> Shaikh had taken up the matter with Sheikh Nahayan Al Mabarak, a<br>> >> senior UAE minister and owner of the Abu Dhabi group, for payment of<br>> >> the at least $500 million in June 2010 against transfer of about 98<br>> >> per cent of government properties. There were a total of 3,298<br>> >> properties that were required to be transferred to PTCL, of which all<br>> >> except only three are currently not in the name of the PTCL owing to<br>> >> legal complexities.<br>> >><br>> >> Later in February 2011, President Asif Ali Zardari also took a special<br>> >> visit to Dubai to seek the intervention of the UAE leadership for<br>> >> payment of $800 million that Etisalat owed to Islamabad for the<br>> >> country’s largest privatisation transaction — Pakistan<br>> >> Telecommunication Company Limited —, but in vain.<br>> >><br>> >><br>> <br></div> </div></body>
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