ISLAMABAD: A meeting of the Cabinet Committee on Privatization (CCoP) has deferred divestment of government shares in Pakistan Petroleum Limited (PPL) and the Oil and Gas Development Company Limited (OGDCL) owing to circular debt issue.
The meeting of the CCoP presided over by Finance Minister Shaukat Tarin was presented a summary by the Petroleum Division, wherein, it opposed divestment of government shares in the PPL and the OGDCL.
The meeting approved the proposal of the ministry that divestment of shares was not feasible at this stage and should be deferred to be taken when the issues like circular debt were resolved, even partially. Thereafter, strategic sale to a reputable Exploration and Development (E&P) company would be a preferred option, the meeting decided.
The Privatisation Commission reportedly wanted divestment of 10 percent shares in PPL and seven percent shares in the OGDCL through public offering to foreign and domestic institutional investors and general public through the Pakistan Stock Exchange (PSE) but the Petroleum Division's contention was that as both the PPL and the OGDCL are profitable companies, the current depressed share prices do not reflect the real worth of these companies.
According to a Finance Ministry's statement, the Privatisation Division tabled a summary, based on a recommendations of the Privatisation Commission Board, regarding provision of funds for hiring of a Financial Advisory Consortium (FAC) of international repute having pertinent experience in the technical, financial, legal, and regulatory fields to conduct the transaction of DISCOs and for carrying out an effective communication strategy effectively.
The Committee considered and approved the summary.
The CCoP meeting was attended by Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Muhammad Hammad Azhar, Federal Minister for Industries and Production Makhdum Khusro Bakhtyar, Federal Minister for Privatization Muhammad Mian Soomro, Adviser to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain, Adviser to the Prime Minister on Commerce Abdul Razak Dawood, SAPM on Finance and Revenue Dr Waqar Masood, SAPM on Power and Petroleum Tabish Gauhar, federal secretaries and other senior officers participated in the meeting.
Copyright Business Recorder, 2021