TRG Pakistan Limited has announced that one of its portfolio companies in the enterprise software industry has signed a pay-for-performance, five-year service agreement with a US telecommunications provider.
In a notification to the Pakistan Stock Exchange, the company said:
It is currently unclear how much the portfolio company will be able to actually bill and collect under this agreement, as such a determination will depend on a number of factors.
These factors are primarily driven by whether the services provided will sufficiently perform to earn all potential fees, and also by whether the client triggers a termination for convenience right as well as to what extent are potential service fees impacted by the telecommunication provider’s customer churn, added TRG.
Subject to these conditions, the potential service fees are expected to be highly material to the current aggregate revenues of the portfolio company.
TRG Pakistan Limited announced that it is actively assessing monetization alternatives for two of its other portfolio companies and these portfolio companies have retained financial advisors for that purpose.
These alternatives include accessing the US public markets. Given the volatility in the financial markets as well as the outlook for the global economy, there is no certainty as to the potential success of any such initiative.