Pakistan's largest conglomerate Engro Corp eyes tower sharing expansion with Veon tie-up

Engro

10/12/2024 05:47

By Ariba Shahid
       KARACHI, Dec 10 (Reuters) - Pakistan’s largest
conglomerate Engro Corp  ENGR.SI , through it’s strategic
partnership with Veon  35V1.LAS , is eyeing expanding telecom
tower-sharing coverage in Pakistan and exploring different use
cases in telecom infrastructure.
    "Pakistan is a very large market in terms of telecom, which
keeps growing larger," Samad Dawood, vice chairman of Dawood
Hercules Corp, which owns 40% of Engro Corp, told Reuters. 
    "This infrastructure business, with scale, allows us to
utilise telecom infrastructure better in Pakistan and eventually
also serve international markets as well,” said Dawood,
identifying countries from "the Atlantic coast of Morocco all
the way to Central Asian states" as potential markets.
    Engro and Dutch telecommunication and digital services
company Veon announced last week plans to pool and manage their
infrastructure assets in Pakistan.
    The companies plan expanding tower sharing coverage to other
operators and looking into to other use cases, which could
include electronic vehicle charging and drone landing.
    Under the partnership, Engro will pay Jazz, Veon’s digital
operator in Pakistan, $188 million and will guarantee the
repayment of Deodar’s intercompany debt of $375 million.
    This remains subject to corporate and regulatory approvals. 
    Deodar, under Veon, has a total tower count of 10,500 in
Pakistan, while Engro's existing tower count under Engro
Enfrashare is 4,063 towers according to Topline Securities.
    Earlier this year, Engro's Dawood said restructuring would
allow the firm to tap into broader economic opportunities,
citing a challenging macroeconomic environment as a reason for
the company's restructuring. 
    Pakistan is navigating a challenging economic recovery path,
having completed a $3 billion IMF bailout in April and now
undertaking a $7 billion, 37-month bailout, approved in
September, to ensure macroeconomic stability.
    However, Dawood now says that things have changed, which
have led to Engro's largest transaction in Pakistani rupee
terms.  
    "The actions taken in Pakistan over the last few quarters,
along with hard decisions for macroeconomic stability, have led
to this deal," he said, adding that interest rates and inflation
falling, combined with Pakistan's ongoing IMF programme, have
also helped."
    Pakistan slashed interest rates to 15% in November from a
record high of 22% earlier this year. Inflation has slowed down
to 4.9% in November, from a multi-decade high of almost 40% in
2023. 
    “The incoming macro stability and IMF’s seal of approval has
a huge impact on foreign financiers to look at Pakistan as an
invest-able market,” Dawood said.

 (Reporting by Ariba Shahid in Karachi; Editing by Michael
Perry)
 ((Ariba.Shahid@thomsonreuters.com; +92 3442834961;))