Wednesday, June 26, 2013

Wateen is undergoing voluntary restructuring and has delisted from the Karachi Stock Exchange because it was unable to meet its debt payments and did not have the necessary liquidity to carry on its day to day operations. Not a good sign for the Etisalat Group in Pakistan. And now it seems the end is near for Warid as well. According to a story published on paklogger.com, a popular Pakistani IT portal – and quoting Reuters - Warid is up for sale and the interested parties – according to Reuters – are the Etisalat Group themselves and a local player, China Mobile, which people know as Zong. According to Paklogger, an unnamed PTA official says that the deal may already have been finalised with Etisalat. But it has also been confirmed from sources that the Warid top management will be off to Dubai this week and while the company is silent now, we can expect some kind of a statement as early as the start of next week. Now, according to the story posted on paklogger, Reuters is quoting ‘sources familiar with the matter’. This is interesting because some market sources say that Etisalat itself has leaked this story in an attempt to affect the valuation of Warid. Until some time back, Zong was quite interested in Warid, as buying up the operation would have catapulted Zong to the number two slot in Pakistan. But recently, sources in the company have hinted that the price is not right. Telenor is not very interested, and it shouldn’t be. Recent growth trends show that it is doing very well on its own, having overtaken Ufone to become the second-largest player in the market. Ufone could use this opportunity to regain that position and according to Reuters, Walid Irshaid, the chief executive of PTCL has confirmed that the company is weighing a potential bid. Mobilink is apparently keeping a close eye on what is going on, but so far there are no indications that it is a likely contender for acquiring the struggling Warid. But it will all boil down to price. Etisalat could end up buying up the operation unless Warid lowers its price, because whoever buys up what is now the smallest tlecom operator in Pakistan will also be taking on a sizeable amount of liabilities.