Engro Corporation Limited (PSX: ENGRO) said in a statement today that it agreed to secure $375 million in the repayment of Deodar’s debt and also includes a fresh $187.7 million to Pakistan Mobile Communications Limited (PMCL) in a new Amalgamation Agreement. used by the company today.
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The transaction still awaits approval of the Honorable High Court entails the sale of PMCL’s tower assets of its subsidiary Deodar (Private) Limited to Enggro Connect which is a subsidiary of Enggro. This step should increase Pakistan’s information & communication technology assets and connectivity.
The goal of this undertaking is to help realize high availability and access to telecommunications in a bid to meet national goals of increasing teledensity.
Under a scheme of arrangement, the telecom infrastructure assets of Jazz, to be conducted through its wholly owned subsidiary Deodar (Private) Limited (“Deodar”) will transfer and vest into Engro Connect, a subsidiary of Enggro Corporation.
Enggro ventured into telecommunication infrastructure in 2018 where offering telecommunication infrastructure support to all these MNOs in Pakistan.
This symbiotic agreement is expected to be constructive for the overall telecom value chain – With Engro’s backdrop, the MNOs are expected to cut down the capital and operating costs allowing them more time to offer improved services and increased coverage.
This cost efficiency will help operators to penetrate into the unserved market to connect millions of Pakistanis which in turn will support the government of Pakistan’s vision to transform the country into a digital economy.
Enggro’s Chairman Hussain Dawood has echoed the same sentiment saying that this is a mutually beneficial and a rather strategic partnership for Enggro and the Telecommunication industry of Pakistan.
”By enlarging the network of our towers, we are enabling MNOs to offer basic services at cheaper rates thereby effectively extending better, cheaper, and efficient connectivity to communities,” he said.
“We have a history of partnership with VEON’s Jazz and this collaboration builds on that further and promotes our objective for a digital Pakistan,” he added.
Enggro Corporation’s President & CEO Ahsan Zafar Syed said that faster, cheaper, and more extensive telecom services are foundational to a better future for Pakistan.
He said this partnership is a positive move that will enable millions of people to be equipped with an opportunity to engage in meaningful ways in the nation’s social and economic development.
Kaan Terzioglu, VEON Group CEO, said: “Our partnership with Enggro Corp, which began in Pakistan, our biggest market, will help Jazz to concentrate on valuable digital services and advanced technologies that support Pakistan’s digital vision.”
It will also assist VEON in explaining a myriad of possibilities for creating shareholder value and new business models across our markets.
Enggro firmly stands for the support of constructs that solve problems together with the common good of communities and for the equitable development of near and distant economies so that no one is left behind in the digital environment.
FAQs
1. What is the PMCL deal?
PMCL refers to Pakistan Mobile Communications Limited, a leading telecom operator in Pakistan, operating under the brand Jazz. This deal likely involves financing or investment in PMCL’s operations, infrastructure, or growth strategies.
2. How much is Engro committing in total?
Engro is committing a total of $562.7 million, which includes $375 million as a debt guarantee and $187.7 million in direct funding.
3. What does the $375 million debt guarantee entail?
The debt guarantee means Engro will back PMCL’s borrowings up to $375 million, reducing risk for lenders and ensuring PMCL secures favorable loan terms.
4. What is the purpose of the $187.7 million funding?
The $187.7 million is likely to be invested in PMCL to support its business expansion, technological upgrades, or financial restructuring.
5. How does this deal benefit Engro?
Through this partnership, Engro may strengthen its portfolio in the telecom sector, diversify its investments, and potentially gain profitable returns from PMCL’s growth.
6. How does this impact PMCL?
PMCL gains financial stability and resources to enhance its operations, invest in new technologies, and maintain its leadership in the telecom industry.
7. Is this Engro’s first investment in PMCL?
This depends on Engro’s prior dealings with PMCL. It could be a new or continuing investment strategy; further details might clarify.
8. How will this deal impact Pakistan’s telecom sector?
The deal is likely to boost PMCL’s service quality, technological advancements, and market competition, benefiting consumers and contributing to the telecom sector’s growth.