Jazz's Digital Headquarters in Islamabad
PHOTO: JAZZ
KARACHI: A Malaysian telecommunication infrastructure services company, in collaboration with Dawood Hercules, has acquired Jazz communication towers for $940 million, which may prove to be an encouraging sign for Pakistan’s external front.
At the moment, current account deficit is the biggest challenge on the external front, according to experts, as it is draining the country’s foreign currency reserves and creating balance of payments headache for the government.
In this scenario, the almost billion-dollar foreign direct investment (FDI) by the Malaysian firm will not be less than a blessing for the country, sources say.
Malaysia’s edotco has acquired Jazz-owned 13,000 towers business Deodar through its wholly owned subsidiary Tanzanite Tower Private Limited. Dawood Hercules will acquire 45% shareholding in the subsidiary.
A Jazz official said sale proceeds would be invested in expanding the company’s network. “We will focus on being more digital,” he said.
“The total transaction consideration for the proposed acquisition of $940 million will be funded through a combination of debt and equity,” a press statement issued by the leading cellular service provider said.
Dawood Hercules (DH Corp), in a notification to the Pakistan Stock Exchange, said its board of directors had approved the acquisition, which would cost it Rs17.43 billion.
“Under the share subscription agreement, DH Corp will subscribe to 1.74 billion shares of Rs10 each of edotco PK at an approximate consideration of Rs17.43 billion. Upon completion of the proposed subscription, edotco Labuan and DH Corp will hold 55% and 45% respectively of the issued and paid-up share capital of edotco PK,” the notification said.
After completion of the sale, Deodar will enter into a master services agreement (MSA) with Jazz, whereby it will continue to provide tower services to Jazz.
Initial term of the MSA is 12 years and it is renewable at Jazz discretion for three consecutive periods of five years each, it said.
The notification informed shareholders that edotco was in the business of integrated telecommunications infrastructure services, providing end-to-end solutions in tower services from tower leasing, co-location, build-to-suit, energy, transmission and operation and maintenance.
“DH Corp has always invested in projects and businesses that directly contribute to Pakistan’s growth and prosperity,” DH Corp CEO Inamur Rahman said, according to the Jazz statement.
“We are confident this enterprise will serve as a beacon for more investment in Pakistan and in our people,” he added.
Jazz CEO Aamir Ibrahim commented, “This transaction will allow Jazz to further improve its core strength in providing best-in-class products and services to its customers.”
“Partnering with Tanzanite Tower will ensure that Jazz customers continue to benefit from the industry leading network quality. It also allows Jazz to focus on its journey to become an innovative digital lifestyle partner,” he added.
Dawood Hercules’ stock price inched down 0.41%, or Rs0.47, to Rs113.45 with trading in 44,900 shares at the PSX.
Published in The Express Tribune, August 31st, 2017.
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