Pakistan, Etisalat close to resolving $800 million payment row

In this file photo, a man walks past a sign at the headquarters of telecommunications company Etisalat in Dubai. (Reuters)
Updated 20 April 2019
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Pakistan, Etisalat close to resolving $800 million payment row

  • Chairman Senate committee on privatization says confident the dispute would be resolved within two months
  • Recovering the amount will be a welcome boost to Pakistan’s cash-strapped government

KARACHI: Pakistan and the United Arab Emirates are inching closer to resolving a fourteen year deadlock with Emirati telecommunications company Etisalat involving a pending $800 million bill from the privatization of Pakistan Telecommunication Company Limited (PTCL), a senior Pakistani official said on Saturday.
An Etisalat consortium bought a 26-percent stake in PTCL for $2.6 billion in 2005 that also gave Etisalat majority voting rights. The UAE firm paid an initial $1.80 billion as per the deal terms, which also included transferring ownership of the properties to PTCL from the government.
Etisalat was to pay the remaining $800 million it owed in six twice-yearly installments of $133 million, but withheld payment as the transfer of some of these properties stalled.
Speaking to Arab News on Saturday, Mir Muhammad Yousaf Badini, the chairman of a Senate committee on privatization, said he was confident that the payment dispute “would be resolved within... two months.”
“Meetings between the officials of Pakistan and Etisalat have been held and it has been agreed to solve the issue mutually through negotiations,” he said.
Etisalat has withheld payment on the grounds that Pakistan has not yet transferred close to 3,400 properties as part of its agreement but the government says only 34 properties are disputed and non-transferable due to legal reasons.
In a briefing earlier this year, the secretary of Pakistan’s privatization commission said the price of untransferable properties had been calculated at market price and deducted from Etisalat’s pending bill.
According to Badini, Etisalat representatives are “physically examining properties which were not handed over to them.”
“Then we will sit with them to decide terms and conditions,” he said.
Recovering this amount from Etisalat would be a welcome boost to the cash-strapped Pakistani administration which is in talks with the International Monetary Fund for a bailout to stabilize an economy in deep crisis.
On Thursday, Pakistani Prime Minister Imran Khan replaced finance minister Asad Umar with a new finance adviser, Abdul Hafeez Shaikh, due to a worsening economic outlook on Umar’s watch and delays in finalizing the IMF deal.
Inflation, at its highest in more than five years, has shocked many Pakistanis who voted for Khan and his promise to eradicate poverty, create jobs and build an Islamic welfare state. Pakistan’s central bank last month lowered growth forecasts and the rupee currency has also lost about 35 percent since December 2017.


Saudi mall operator Arabian Centres bucks retail malaise as profits surge

Updated 21 August 2019
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Saudi mall operator Arabian Centres bucks retail malaise as profits surge

  • Mall operator defies online shopping pressure by lowering discounts to tenants, boosting occupancy and rental revenues

LONDON: Arabian Centres, the Saudi mall operator which went public in May, said first-quarter consolidated net profit almost trebled to SR227 million ($60.53 million) as occupancy edged higher across its shopping centers. Revenues increased by about 2.5 percent over the year to SR572.5 million.

The results helped to propel the group’s shares 3 percent higher on Tuesday.

The group said that it boosted performance by offering lower discounts to its tenants which helped to drive rental revenues. Like-for-like occupancy across all malls increased  to 93.2 percent from 92.4 percent in the year earlier period. Finance costs fell by about 65 percent from a year earlier to SR73.9 million.

FASTFACT

 

27 - Arabian Centres plans to expand its mall portfolio to 27 within four years.

Retailers across the Middle East are coming under increased pressure as more consumers shop online, while at the same time, tourists are spending less in dollar-pegged economies because their purchasing power has been cut by the strength of the greenback. Still, in Saudi Arabia, the under-served retail market is expected to receive a boost from rising investment in the entertainment sector, especially new cinemas.

“Faced with the rising challenge of online shopping, the brick-and-mortar retail segment has sought to diversify its offering to secure its customer base, providing an increased range of leisure and entertainment facilities,” said Oxford Business Group, in a report analyzing emerging trends in the Saudi retail sector.

“The reintroduction of cinemas to the Kingdom in April last year ... is expected to increase retail footfall,” it said.

Arabian Centres, majority-owned by Fawaz Alhokair Group, listed its shares on the Tadawul stock exchange in May — the first to do so in the Kingdom under Rule 144a, allowing the sale of securities, mainly to qualified institutional buyers in the US.

The group aims to expand to 27 malls within four years.