ISLAMABAD: The board of Privatisation Commission (PC) has approved thetransaction structure for the revival of Pakistan Steel Mills Corporation(PSMC) which has not been operational since June 2015.
The decision was taken by the commission in a meeting chaired by FederalMinister for Privatisation Mohammed Mian Soomro in Islamabad. The meetingwas attended by the board members and senior officials of the ministry.
In the meeting, various matters relating to Pakistan Steel Mills, thestatus of hiring of Financial Advisory Consortium for Roosevelt Hotel,offloading of Oil and Gas Development Company (OGDCL) and PakistanPetroleum Limited (PPL) shares, Guddu power plant and Sindh EngineeringLimited were discussed.
The PSMC was one of the premier state owned enterprises which started itscommercial operations in early eighties and had played a pivotal role inthe economy of the country when it was fully operational. The transactionstructure approval was agreed in principal and financial adviser was askedto move ahead with procedural follow up processes expeditiously.
[image: Privatisation Commission transaction structure PSM]
The transaction structure approved by the PC board will be presented to theCabinet Committee of Privatisation for approval.
The Terms of References (ToRs) for the hiring of financial advisors forRoosevelt Hotel, owned by Pakistan International Airlines (PIA) were alsodeliberated upon by the board members.
They discussed divestment of up to 10 per cent of the government shares inPakistan Petroleum Limited (PPL) and up to 7 per cent shares in OGDCL.
After extensive discussion on transaction fundamentals, market conditionsand Pros and Cons of various options the board decided to proceed for thehiring of Financial Advisors Consortium (FAC) for divestment of 10 per centof GOP shares in PPL.
Moreover, proposals from FAC will be obtained for documented as well asundocumented modes of transactions, the process for FAC hiring for OGDCLwill commence once the hiring of FAC for PPL is completed.
PC board decided to re-invite the expressions of interest (EoIs) for thehiring of financial advisers for the privatisation of Guddu power plant dueto exorbitant financial bid submitted by the top rank consortium earlier.
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The commission also decided to re-invite the Expression of Interest for theappointment of Financial Advisor Consortium (FAC) for the privatisation ofSindh Engineering Limited (SEL).
The previous shortlisted top-ranked consortium was insisting on changes tothe agreed Financial Services Agreement, including changing the transactionscope and payment terms which could not be accepted by privatisationcommission.
The board also considered the WAPDA-owned property in Swat and KhyberPakhtunkhwa (KP) and decided to refer the matter to CCOP.
It is pertinent to mention that the Ministry of Privatisation is going tocommence the auction of properties owned by the federal government fromSeptember 7.
Privatisation minister said that the commission is fully geared up inachieving the objective of expediting the privatisation of state-ownenterprise to mitigate the drain of these enterprises on the governmentbudget.
This is the seventh transaction approved since the start of theprivatisation plans adopted in October 2018 and the commission will befocusing to complete these transactions successfully along with othertransactions which are currently in progress.
Earlier in the day, privatisation minister ensured in another meeting thatlong-standing matters of K-Electric (KE) are on right track to be settledwith all stakeholders’ participation.
He added that the long-standing matters were discussed and aninter-ministerial committee under the chairmanship of the privatisationminister was formed and several meetings were held consistently and mattersrelating to the deed of the undertaking, deed of extinguishment andpayables and receivables of K-Electric were discussed and moving towardssettlement.
It is a good sign that the privatisation of 19 entities is processedsimultaneously, the largest ever by the privatisation ministry, and thereis no denying the fact that the ongoing process logically is time-consumingas there are rules specified and the gestation period for an entity to beprivatised.
