It is clear that Emirates Telecommunications (Etisalat) offered significantly more in the bidding process than they subsequently thought they had to and, as a result, began to renegotiate the terms from day one. Whether they achieve the changes they seek or whether the Pakistani government cancels the sale and considers alternative arrangements, Etisalat has demonstrated that it is not a player, first in setting an auction price and then in following through. Of course, they should lose their deposit and surely the Pakistani government is evaluating the possibility of claiming compensation.
Other governments who do not want to be dragged into these types of machinations should take heed and only deal with an approved list of potential bidders who are professional and who can fund the promises they make. Etisalat is clearly not in this category. Any opening up to these less reliable bidders should always be accompanied by the requirement that their bid be fully backed and guaranteed.
Onésimo Alvarez-Moro
See article:
Pakistan's privatisation minister was yesterday holding last-ditch talks in Dubai to try to salvage the government's planned $2.6bnsale of Pakistan Telecommunication Company to Emirates Telecommunications (Etisalat).
Abdul Hafeez Shaikh rushed to Dubai late on Sunday after the government began proceedings to cancel the sale, under which Etisalat had agreed to buy a 26 per cent stake in PTCL, Pakistan's largest telecoms company, in return for management rights.
The cancellation followed Etisalat's failure on Saturday to meet a second deadline for paying the $2.34bn still outstanding on the deal.
See full Article. Also see Pakistan halts sale of PTCL stake to Etisalat (paid subscription required for both).
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