ISLAMABAD, Oct 28: Etisalat of UAE did not make the final payment required to take over 26 per cent stake along with management control of Pakistan Telecommunication Company Limited (PTCL) on the extended deadline of October 28, giving strength to the word that the country’s largest sale deal failed to materialize.

Privatization Commission officials including Federal Privatization Minister Dr Abdul Hafeez Sheikh and Secretary Tehsin Iqbal were not ready to say a word on record about the transaction.

The minister was not taking calls on his mobile and residential telephone lines. A young boy picked up the telephone at Secretary Tehsin Iqbal’s residence and this correspondent heard Mr Tehsin saying he was not at home.

A senior government official, however, confirmed that the highest bidder of PTCL did not make final payment or any other communication about the transaction until 2100 hours on October 28.

“I cannot speculate about tomorrow but I can confirm that final payment has not come as of Friday night”, said a senior official requesting anonymity. “I am not aware if something is going on at the top government level but to me the transaction has lost the ground,” he said.

He said he could not say if Etisalat board of directors met on Friday in UAE to consider the PTCL issue.

He said the Privatization Commission may come out with a formal statement or hold a news briefing on October 29 to say whether or not to confiscate the 25 per cent of the $2.6 billion first instalment made by Etisalat and cancel the deal or whatever may be the future strategy because legally it had to wait until midnight on October 28.

Responding to a question, he ruled out payment by Etisalat in the United States to utilize extended banking hours there but said the government could not take even a 0.1 per cent chance to announce anything until October 29.

Last month, the government had granted one-month extension to Etisalat (till October 28, 2005) to complete the privatization transaction of PTCL and take over the entity on the request of Etisalat.

The request was formally accepted by Prime Minister Shaukat Aziz reportedly in view of difficulties being faced by Etisalat in completing the financial requirements owing to re-composition of its board of directors and some other post-privatization conditionalities.

It would be the second time a UAE investor backing out of the privatization transaction. Earlier, Kanooz Al-Watan had backed out of the privatization of Karachi Electric Supply Corporation.

On September 28, the privatization commission had said “following the meetings between CEO of Etisalat and senior officials of Government of Pakistan, the contracting parties i.e. government of Pakistan and Etisalat have agreed to extend the completion period until October 28, 2005”.

“The interceding period will be used to finalize the privatization of Pakistan Telecommunication Company Limited”, the September 28 statement had added.

The Etisalat had won the 26 per cent stake along with management control of PTCL on June 18, 2005 at a total bid price of $2.6 billion. It was required to make 25 per cent down payment within 14 days and remaining 75 per cent in 60 days. As such, full payment by Etisalat and handing over and taking over of Pakistan’s largest company should have been completed by August 28, 2005.

Privatisation Commission (PC) had also granted a post-bidding favour to Etisalat by reducing the time from 36 months to 18 months to pledge 26 per cent PTCL ‘B’ class shares for raising necessary funds, a relaxation which was refused to other bidders during the due diligence phase.

When the issue of PTCL privatization was placed before the Cabinet Committee on Privatisation (CCoP) for discussion in its meeting on September 1, it was told that Etisalat had requested permission to pledge its ‘B’ class shares 18 months after completion of the transaction, instead of 36 months envisaged in the bid documents, to enable it to arrange necessary financing.