Warid Telecom for Sale in Pakistan
Pakistan mobile operator Warid Telecom has been put up for sale by its Abu Dhabi owners and is likely to draw interest from China Mobile and Etisalat, sources familiar with the matter said on Tuesday.
The Abu Dhabi Group, a conglomerate led by a ruling family member in the oil-rich emirate, is seeking to sell all 100-percent of shares in Warid Telecom, two of the sources said, speaking on condition of anonymity.
The third source, however, said the company would also be prepared to sell a smaller controlling stake.
Pakistan’s mobile telecommunications sector has five operators and is ripe for consolidation after a period when a troubled economy, increasingly high levels of market penetration and stiff competition has forced companies’ margins lower.
The sellers have mandated US investment bank Lazard and British lender Standard Chartered as advisers for the process, the sources said. One estimated a sale could fetch about $1 billion.
Pakistan Telecommunications Company Ltd (PTCL) Chief Executive Walid Irshaid said the company is weighing a potential bid.
“We are interested to see if it makes sense for us, but it’s not only us. Warid is an existing operator that has been here for many years and so we’re saying ‘let’s look at the prospects,’” he told Reuters.
“There are too many players in Pakistan. Margins have eroded for everybody and the market must consolidate – we’re all operating under low margins and low ARPU (average revenue per user) and that isn’t long-term sustainable.”
Shrinkage: Warid launched its cellular services in Pakistan in May 2005 and had 12.54 million subscribers at the end of March of this year, down from 17.39 million in 2010-11, making the company the country’s smallest operator.
Pakistan’s total subscriber base rose 12.2 percent to 122.1 million over the same period, meaning Warid’s market share fell to 10.3 percent from 16 percent.
In 2007, Singapore Telcommunications bought a 30-percent stake in Warid for about $758 million. That stake purchase gave Warid Telecom an enterprise value of about $2.5 billion.
SingTel sold back that stake in January for $150 million and a right to receive 7.5 percent of the net proceeds from any future sale, public offering or merger of Warid.
The Abu Dhabi conglomerate also agreed to sell Warid Telecom’s Uganda business to Bharti Airtel in April without revealing the financial details of the transaction.
Bharti recently agreed to buy the remaining 30 percent in Warid Telecom Bangladesh after taking a 70 percent stake in that business in 2010.
Source: Daily Times