Thursday, October 3, 2013

Cabinet allows Nepal Telecom to bring in strategic partnership in principle

The cabinet today approved Ministry of Information and Communications’s proposal to bring in a strategic partner for Nepal Telecom, in principle.
Though the government has not yet decided number of its shares it is going sell, the decision has paved the way to divest part of its shares to the strategic partner.
Nepal Telecom has been – since last couple of years – asking the government to allow it to bring a competent strategic partner. After today’s green signal of the cabinet, the process will take momentum.
The government plans to divest 30 per cent of its shares, according to the recommendation of the technical committee that was formed to study the strategic plan. The technical team is preparing an expression of interest to hire an international consultant to help Nepal Telecom find a right partner.
The telecom – only one of the largest dividend provider and largest tax payer to the government – plans to invite applications next month for a consultant, who will prepare the bid documents for potential strategic partners and prepare a due diligence report of Nepal Telecom besides performing other tasks.
The strategic partner needs to invest Rs 30 billion to Rs 40 billion and it’s a tough as the current working style of the government entity is making it less efficient to compete with the private sector players in the sector.
The government has some 92 per cent stake in the company as it had divested 150,000,000 units of its shares that are now being traded at the Nepal Stock Exchange at around Rs 580 per unit.

ADB loan approved
The cabinet also decided to approve Asian Development Bank’s (ADB) loan assistance of Rs 7.35 billion for the implementation of the South Asia Sub Regional Economic Assistance Road Network Project. Finance secretary and joint secretary will be signing the agreement on behalf of the government.

Anti-Money laundering laws sent to committee
The cabinet also sent Anti-Money Laundering Regulations 2070 BS, Reconciliation Act 2068 BS and Mutual Legal Cooperation Regulations 2070 BS – proposed by Ministry of Law and Finance Ministry – to the Bills committees.

No comments: