Tuesday, October 01, 2013

Breaking: Wateen Goes Private; Returning to its UAE-Based Shareholder

Tuesday, October 01, 2013
After just three years of going public, Wateen Telecom Limited (KSE: WTCL) is going private; has returned to its UAE-based majority shareholder, Warid Telecom International (WTI). Last week, the KSE board approved WTIs voluntary delisting request dated March 28, where the latter will buy back, under delisting regulations, Wateens ordinary shares listed on the three bourses at a minimum price of Rs. 4.50.

Wateens management has called an extraordinary general meeting on Tuesday, 15th October 2013, to seek its shareholders approval for the voluntary delisting of the Companys shares from all three Stock Exchanges in Pakistan.

Apparently, Wateen is going private for the same reason it went public. The grapevine during its IPO days suggested that Wateen needed equity injection for debt management, and not capital expenditures. Three years later, the purpose of delisting is unequivocally financial restructuring, announced by the sponsor itself in March:

"WTI has assessed the position and believes there is no longer any equity value in the business for existing Wateen shareholders; and that without significant restructuring, which can only be executed if the business is taken private, the business will face an uncertain financial future which is likely to result in the crystallisation of a substantial shortfall for creditors."

The sponsor-which is part of the Abu Dhabi Group and now fully owns Warid Pakistan-sounded confident that ordinary shareholders will get a good deal, given Wateens woes. "WTI believes that the de-listing provides the shareholders with an exit from the business at a return of value which is in excess of that which they would receive on an orderly disposal of the business."

There are questions as to whether Wateen-a Company that holds licenses in key telecom segments and owns vast fiber optic infrastructure and connectivity networks-would be able to straighten out its financial issues. The Companys balance sheet is said to be saddled with an outsized amount of debt. It had declared an after-tax loss of Rs1.71 billion for the nine-months ended March 2013.

Wateens business prospects currently offer a mixed picture. While business is said to have improved in segments like long distance and international telephony as well as carriers business, the Wimax broadband services are bleeding the Company in a competitive market of low customer loyalty. But given the right focus and investments, Wateen can give other market participants a serious run for their money.

In this context, all punditry is now focused on whether the sponsors fresh equity shots can stand the test of time for a revival in Wateens fortunes.


  1. how do i sell my shares

  2. Contact THK Associates acting as share registrar's office for Wateen

  3. Contact THK Associates acting as share registrar's office for Wateen


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