ISLAMABAD: Federal Minister for Privatization Mohammedmian Soomro chaired a meeting of Privatization Board (PC) here on Thursday.
In the meeting, various matters relating to Pakistan Steel Mills (PSM), the status of hiring of Financial Advisory Consortium for Roosevelt Hotel, offloading of OGDCL and PPL shares, Guddu Power plant and Sindh Engineering Limited were discussed.
The PC Board approved the transaction structure for the revival of Pakistan Steel Mills, which has not been operational since June 2015.
The PSM was one of the premier state-owned enterprises, which started its commercial operations in early eighties, and played a pivotal role in the economy of the country when it was fully operational.
The transaction structure approval was agreed in principle and financial advisor (FA) was asked to move ahead with procedural follow-up processes expeditiously.
The transaction structure approved by the Board of Privatization Commission will be presented to the Cabinet Committee of Privatization (CCOP) for its approval.
The Terms of reference (TORs) for hiring of FA for Roosevelt Hotel, owned by the PIA were also deliberated upon by the board members.
The PC Board also discussed divestment of up to 10 percent of the GOP shares in Pakistan Petroleum Limited (PPL) and up to seven percent shares in the OGDCL.
After extensive discussion on transaction fundamentals, market conditions and pros and cons of various options the board decided: PC to proceed for hiring of the Financial Advisors Consortium (FAC) for divestment of 10 percent of the GOP shares in the PPL. Moreover, proposals from the FAC will be obtained for documented as well as undocumented modes of transactions, the process for FAC hiring for the OGDCL will commence, once the hiring of the FAC for the PPL is completed.
The PC board decided to re-invite the EOIs for hiring of the FAs for the privatisation of Guddu Power Plant, due to exorbitant financial bid submitted by the top-rank consortium earlier.
The Privatisation Commission Board also decided to re-invite the Expression of Interest for the appointment of Financial Advisor Consortium (FAC) for the privatisation of Sindh Engineering Limited (SEL).
The previous short-listed top-ranked consortium was insisting on changes to the agreed Financial Services Agreement, including changing the transaction scope and payment terms, which could not be accepted by Privatisation commission.
The board considered the WAPDA-owned property in Swat, KP; and finally decided referring the matter to CCOP.
It is pertinent to mention that the Ministry of Privatisation is going to commence the auction of properties owned by the Federal Government of Pakistan from September 7th 2020.
The Federal Minister Privatisation said, the Privatization Commission was fully geared up in achieving the objective of expediting the privatization of state-owned enterprises to mitigate the drain of those enterprises on the government budget.
This is the seventh transaction approved since the start of the privatization plans adopted in October 2018, and the Privatization Commission will be focusing to complete these transactions successfully along with other transactions, which are currently in progress.
In another meeting earlier, the minister ensured that long standing matters of the KE are on right track to be settled with all the stakeholders' participation.
The long standing matters were discussed and an Inter-Ministerial Committee under the chairmanship of the Minister for Privatisation was formed and a large number of meetings were held consistently, and matters relating to deed of undertaking, deed of extinguishment and payables and receivables of K-Electric were discussed, and were moving towards settlement.
It is a good sign that the privatisation of 19 entities is processed simultaneously, the largest ever by the Ministry of Privatisation, and there is no denying the fact that the privatisation process logically is time consuming as there are rules specified and gestation period for an entity to be privatized.
Copyright Business Recorder, 2020
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