ETISALAT OFFERS HIGHEST OFFER OF US $ 2.59896 BILLION TO ACQUIRE 26% STAKES IN PTCL PC BOARD RECOMMENDS OFFER FOR CCOP APPROVAL

Islamabad, June 18, 2005

The Privatisation Commission Board on Saturday evening recommended the highest offer of $2.59896 billion to acquire 26 per cent shares and management control of the Pakistan Telecommunication Company Limited (PTCL) received from UAE's company Etisalat for approval of the Cabinet Committee on Privatisation (CCOP). The offer was made at per share bid price of $1.96. In rupee terms, the total value of 1.326 billion (26 per cent) shares comes to Rs155.158 billion, highest in the history of Pakistan, at a rate of Rs117.01 per share. Thus, the total value of the company has been placed at Rs596.76 billion."

Earlier, Mr. M. Tahsin Khan Iqbal Secretary PC explained the bidding procedure and the sealed bids were dropped in the transparent bid box by theauthorized representatives of all the three bidders who became eligible after depositing US $ 40 million each as earnest money within the stipulated period. A large number of the representatives of the national and international print and electronic media were present to witness the proceedings of the historic event of the privatisation of Pakistan's mega utility. The sealed bids were opened and read out by the three representatives of the media i.e. Syed Farhan Bokhari of daily, Financial Time, UK, Miss. Saniyya Gohar of Blue Chip magazine and Mr. Nadeem Malik of daily, The News, Islamabad. Dr. Abdul Hafeez Shaikh Fedral Minister for Privatisation & Investment supervised the bidding process while Mr. Owais Ahmed Khan Leghari Minister for IT & Telecommunication, Sheikh Rahid Ahmed Minister for Information & Broadcasting, Ministers of State for Finance, I.T & Telecom and Chairman BOI were present on the occasion.

Dr Abdul Hafeez Shaikh Minister for Privatization and Investment declared Etisalat as the highest and the winning bidder. Addressing on this occasion he termed the event as historic and said that it was first time in our national history that in one day we received FDI worth US $ 2. 50 billion, which has raised PTCL worth to Rs. 600 billion. He said the highest bid of the country's largest ever transaction would be presented to the CCOP on Monday for approval. He said it was very encouraging that all the three bidders belonged to friendly countries.

The second highest bidder, China Mobile of China, offered a bid price of $1.06 (Rs63.48) per share or$1.409 billion (Rs84 billion) for 26 per cent shares, which was about 84 per cent lower than the highest bid. It estimated total value of the company at
Rs323.74 billion. The third bidder, Sing Tel of Singapore, offered a bid price of $0.88 (Rs52.54) per share or $1.16688 billion (Rs69.663 billion) for 26 per cent shares. This bid was about 80 per cent lower than the highest bid. Sing Tel valued the whole company at Rs267.9 billion. This level of interest and commitment by bidders of international repute speak volumes of the economic progress of Pakistan and investor friendly policies of the Government of Pakistan.

PTCL is the leading provider of basic telephone services to the private sector in Pakistan with over 4.4 million telephone lines in service. Besides providing fixed line and ancillary services, PTCL owns Pakistan Telecommunication Mobile Limited, one of five GSM cellular providers in Pakistan and Paknet a countrywide Internet service provider. Its strong financial position demonstrated during FY 2004 excluding subsidiaries as per unconsolidated financials of PTCL indicates: Revenue PKR 74,124
million, Operating profit: PKR: 41938 million, Net Profit after Tax: PKR:29,169 million, Total Assets: PKR: 141,595 million, Total Equity: PKR: 83,600 million, with a network of installed 5.27 million lines and 4.43 million access lines in service.

The independent regulator, Pakistan Telecommunication Authority (PTA), has liberalized and deregulated the sector to facilitate an expected increase in competition subsequent to the sale of various telecom licenses. A consortium consisting of JP Morgan and Goldman Sachs International is advising Government of Pakistan on the privatisation of PTCL. The cabinet has already given its approval for sale of PTCL as integrated entity in August 2000. The government has 88 % shares of Company and after the sale of 26 % shares the government would retain 62 % shares in the company.