PTCL Injects Rs 11 billion in Ufone for Expanding Operations

by Yasir Ameen

Pakistan Telecommunication Company Limited (PTCL) has injected Rs 11 billion in its subsidiary, Ufone, for expanding its countrywide operations in different areas including network infrastructure, technical advancement and marketing.

Official sources said the PTCL has lent huge amount of Rs 11 billion to its subsidiary on soft-terms under subordinated debt agreements.

These loans are recoverable in eight equal quarterly installments commencing after a grace period of 3 to 4 years by 2015, carrying mark-up at the rate of three months KIBOR plus 82 to 180 basis points.

An official of Ufone said that the company’s expenses have been increased substantially on high cost of operations in the country, therefore, it has sought financial aid to meet its spending with smoothly.

Besides, there are technology advancement program of the network for providing various new services to customers, he added.

“Ufone expansion plans need a financial assistance on long-term basis in order to scale up its services in the future, hence it has been aided its parents company which has strong liquidity position,” an official said on the condition of anonymity.

Ufone witnessed 7 percent growth in revenues in the closing quarter of financial year 2011-12 compared with quarter of pervious fiscal year, showing a continuation of positive trends in earnings despite tough financial circumstances.

Pakistan Telecommunication Company Limited (PTCL) financial results showed the revenues increased to Rs 11.6 billion in the current financial year 2011-12 that supported the corporation to sustain its eroding earnings on the back of high operational costs.

According to estimates its profits up by 141 percent to Rs 233 million in the first quarter on the back of sustainable service business thanks to new packages.

Ufone’ positive growth in this period supported its parent company to sustain financial position with minimum losses.

The group’s net profit after tax at Rs. 2.2 billion was 8% lower as compared to corresponding period last year. PTCL’s net profit after tax at Rs. 1.4 billion was 32% lower mainly because of decreased level of other operating Income.