Pakistan Telecom Industry might witness another merger acquisition: Here’s everything you need to know!

It should be noted that PTC has injected a cash amount of around Rs. 7.5 billion in Ufone to help the company meet its increasing working capital requirement.

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The Pakistan Telecom Industry might witness another merger acquisition with Ufone.

Resources state that the PTC recently issued a Request for Proposal (RFP) to various financial institutions asking them to submit their proposals for an advisory role for a possible merger with other telecom operators.

Topline Securities submitted an acquisition proposal that stated that if PTC takes over Ufone, its sales might increase by 2.5x (Rs. 152 billion).

The new net value of the company will be around Rs. Seventy-six billion i.e., Rs. 15/share for PTC. This amount is a lot higher than the Sum of Total Parts (SOTP) of PTC, which stands at nearly Rs Twenty-nine, a 63% discount to the current market price.

The report submitted by Topline also suggested that whether it be a merger or an acquisition, the scenario would lead to an improvement in PTC’s financial standing.

It should be noted that PTC has injected a cash amount of around Rs. 7.5 billion in Ufone to help the company meet its increasing working capital requirement.

The report further stated:

The merger/acquisition of Ufone by/with Telenor/Zong would result in more synergies than those realized by other telecom companies in the past. A deal between Telenor and Ufone would result in 50% of the subscribers, higher than Jazz, whereas Ufone and Zong will result in 35% of the subscribers, which will be at par with Jazz.

Many such transactions have already taken place in Pakistan and have delivered fruitful results:

  • The Share Swap Agreement between Mobilink and Warid paved the way for synergies worth Rs. 8 billion, and the shareholders of Warid got 15% of the joint entity, which was then rebranded as Jazz.
  • Jazz and Warid’s combined tower portfolio were 13,000, out of which 3,000 towers overlapped. Hence, Jazz sold 3,000 towers to Engro Corp and Edotco at the price of US $60-100K/tower and generated an additional cash inflow of US $200-300 million.

In other news, leading tech companies worldwide, including Facebook, Silver Lake, KKR, and General Atlantic, are eyeing Reliance Jio, the esteemed global Indian telecom company. In case a transaction takes place, the value of Jio would go up to 63 billion US dollars.

What are your thoughts on this? Please share with us in the comment section below.

  • to be honest Pakistan is a sinking market and no body wants to get on board. US and west will create far more problems for Pakistan financially. FATF is nothing, Pakistan must a law to limit foreign investment upto a certain percentage like India because most companies are here to loot.


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