The Norwegian telecommunication giant appoints Citigroup to help find a buyer for its stake in Easypaisa worth hundreds of millions of dollars a strategy that will see Telenor leaving Pakistan, following in the footsteps of companies such as P&G and Shell.
It looks like Telenor will sever the last link with Pakistan. Norwegian telecommunications giant Telenor is considering selling out its share in Easypaisa, which is one of the largest digital banks of Pakistan, and has hired Citigroup for handling the matter, revealed sources to Bloomberg. If the Telenor stake in Easypaisa is sold successfully, this would be the final step for the company in withdrawing from Pakistan.
Citigroup spearheads Telenor’s search for buyer of its Easypaisa stake
Citigroup has been mandated by Telenor to seek bids for the stake sale in the coming months; however, it should be noted that nothing concrete has been finalized yet. The Telenor Easypaisa stake sale is still at an embryonic stage as the Norwegian group looks for a buyer that would be willing to offer a few hundred million dollars for the stake.
The second exit: The Telenor’s complete exit from Pakistan begins to unfold
Following an earlier move by the same telecommunications firm, the disposal of the Telenor Easypaisa stake sale would see the firm divesting yet another part of its Pakistan-based activities. It is important to note that Telenor had previously exited the mobile telecommunication industry in Pakistan through a business transaction valued at approximately $490 million. With the completion of the disposal of the Easypaisa business, Telenor would have no more operations left in Pakistan.
Implications of the ownership shift at Easypaisa
The significance of the importance of the strategic asset that is Easypaisa goes much further than its transactional capabilities. The company bridges the gap between the country’s mobile money ecosystem and its larger vision for becoming more digital as far as its finances go. In other words, the new owner of the company would have an opportunity not only to acquire a share owned by Telenor, but also considerable influence over Pakistan’s popular fintech platform.
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Signal from Pakistan’s foreign investments and what it means
The Telenor Easypaisa share sale comes at a time when Pakistan is actively seeking foreign direct investments into different sectors of its economy. The total withdrawal by Telenor, along with the previous departures of companies like Procter & Gamble and Shell, emphasizes the message that foreign investors are finding the Pakistani business climate increasingly tough for operations. Every new departure increases pressure on the Pakistani authorities to deal with the inherent problems from currency fluctuations to complicated repatriation that deter foreign investment.
The way forward
To the Pakistani digital banking industry and the millions of consumers who use Easypaisa services, the fate of Telenor Easypaisa’s successor is as important as its price tag.
