The Cabinet Committee on Privatisation (CCoP), which is meeting here on Monday with Prime Minister Shaukat Aziz in the chair, will approve the bidding results of Javedan Cement Limited (JCL) and Mustehkam Cement Limited (MCL), but Letters of Acceptance (LoA) would be issued in accordance with the Lahore High Court directions, official sources told Business Recorder.
The issue of Bolan Textile Mills (BTM) will also come under discussion and the committee is expected to allow the privatisation commission to approach the highest bidder for enhancement of their offer up to 90 percent of the reference price, sources added.
The privatisation commission had accepted the highest bid of Rs305 per share for MCL made by M/s Bestway Cement Limited which was 40.25 percent higher than the reference price of Rs182.23 approved by the CCoP.
However, in accordance with the President's Order No 12 of 1978, the commission on September 17 offered former owner, Mian Farooq Ahmed Sheikh, to match the highest bid of Rs305 per share by September 24. The hearing of the case at the Lahore High Court has been set for September 28.
The privatisation commission had recommended to the board to approve the highest bid of Rs305 per share (total bid Rs 3.204,919 billion) for 85.29 percent (10,507,934 shares) of MCL.
The LoA will be issued in light of the response received from Mian Farooq Sheikh or as per directions of the high court.
In case of Javedan Cement Limited (JCL), the commission also offered the former owner, Valibhai Kamrudine (Sindh) Private Limited but he declined in writing to match the highest bid after which Haji Ghani Usman and & Group was declared the successful bidder.
It may be mentioned here that Haji Ghani Usman and & Group had matched the minimum acceptable price of Rs80 per share when Siddiqsons Denim Mills Limited and Al-Manuf Corporation declined to match the reference price set by the CCoP.
The commission, in its summary to the CCoP, has recommended to approve the highest bid of Rs80 per share (Rs 4.315,947 billion) made by the bidder for 96.34 percent (53,949,343 shares).
The LoA would be issued to the party in light of direction given by the Sindh High Court, the commission assured the CCoP.
BOLAN TEXTILE MILLS The privatisation commission held the bidding on September 15 wherein 12 parties participated after depositing the earnest money of Rs 10 million.
According to documents made available to Business Recorder, 12 parties, which participated in the first round of bidding were: Abdul Hamid Khan, Quetta, RS 45 million; A.N. Enterprises, Karachi, Rs 58 million; Abdul Sattar Noor Mohammed & Co, Karachi, Rs 69.5 million; Choice Enterprises, Karachi, Rs 63.5 million; Hammad Enterprises, Faisalabad, Rs 60 million; Kohisar Enterprises, Karachi, Rs 42.500; Muhammad Nadeem & Co, Lahore, Rs 68 million; Nawaz Khan Trading Co, Lahore, Rs 69 million; SAF & Company, Karachi, Rs 70.7 million; Sadaf Enterprises, Karachi, Rs 72.5 million; S.S. Enterprises, Karachi, Rs 35.025 million; Tanveer Trading Co, Lahore, Rs 51 million.
In the process, top three parties became eligible for the open auction (round II), which were required to increase the bid price by Rs500,000 or multiple thereof.
As a result, Sadaf Enterprises raised their bid to Rs 110 million; SAF & Company, Rs 105 million; and Nawaz Khan Trading, Rs 89 million.
As per laid down procedure, the commission asked parties to equate or exceed the bid to Rs 141,705 million but they declined.
The bidders were explained the position that none of the offers were acceptable as those were much lower than the minimum acceptable price set by the government.
They were, however, informed the commission would seek further advice in this behalf from the board and the CCoP.
THE COMMISSION HAS SUBMITTED FOLLOWING POINTS FOR CONSIDERATION OF THE BOARD AND THE CCOP:
1) The land and the building of the factory were acquired by the Balochistan government for establishment of Balochistan University of Information Technology and Management Sciences (BUITMS), which is already operational and is urging to remove equipment and machinery for smooth functioning/further expansion.
2) The equipment and machinery is ageing/rusting with the result of continuous loss in its worth.
3) In case of further delay in lifting of equipment/machinery, management of the university has indicated their intention to uproot it for commencing the construction work for classrooms.
In that scenario chances of pilferage as well as damage to machinery will be quite high.
4) Steel prices are declining internationally and any further attempt to re-bid the machinery/equipment is bound to flop.
5) The equipment and machinery is of very old vintage and of Chinese make and is not useful to textile manufacturers.
6) Possibility of success in fresh bidding appears to be very remote as potential bidders in this field belong to a restricted group and they expressed their strong disapproval of the acceptable minimum price fixed by the government.
Keeping in view the above stated position, the commission has sought permission to approach the highest bidder, ie Sadaf Enterprises, in writing to further raise the bid to a level of 90 percent of the minimum acceptable price of Rs 141.705 million, which comes to Rs 127.534 million.
In case of decline, the next highest bidder, ie, SAF & Company, would be asked to do the same. The third highest party, ie, Nawaz Trading Company has already declined to go further the offered price during the bidding on September 15.
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