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ISLAMABAD: Privatisation Commission (PC) is yet to receive Statement of Qualifications (SoQ) from the investors/parties that are interested in purchase of upto 74 percent shares of Pakistan Steel Mills (PSM), well informed sources told Business Recorder.

Sharing the details, sources said, “Pakistan Steel Mills Transaction”, PC Board was informed recently that Scheme of Arrangement (SoA) was submitted by PSMC with SECP on August 27, 2021, while Expression of Interest (EoI) for prospective investors was published on Aug 31, 2021, wherein deadline for submission of EoI was September 30, 2021, and SoQ was to be submitted by October 15, 2021. However, the deadline for submission for SoQ has been extended till December 15, 2021.

“The date of SoQ has been extended on the request of the interested parties in view of complicated documentation requirement particularly by the international investors,” said an official of Privatisation Commission.

PC has also commenced roadshows for marketing of the transaction, both locally and internationally, from September 13, 2021. Major global companies involved in steel production participated in the roadshows.

Insiders, who are watching PSM transaction very closely, told this scribe that second valuation is being conducted at the behest of FA who earlier had advised to liquidate PSMC if the first valuation was considered for the purpose of privatisation as it cannot provide any incentive for investors in privatisation.

PSM core assets: Another valuation to lure investors on the cards

The pressure by the PC management for alteration in the earlier valuation was also resisted by Chairman PSM Board of Directors, Amir Mumtaz.

However, Shaukat Tarin, the top boss at Q Block, had conveyed his annoyance to Chairman PSM Board for resisting fresh valuation of PSM core assets as he was not satisfied with the first valuation.

According to the insiders, the legal position will become questionable if a new value becomes the basis of bidding or reserved price for privatisation as it will generate new debate in the market if the lower valuation becomes the reference price for privatisation.

“It is strange that the EoI has been invited, understandably on the basis of approval of all due diligence reports but the PC continues to clear the backlog of old yet to be approved for payment to FA, which is a very big amount despite the fact there is nothing new as these due diligence reports are the replica of the first report conducted by the same FA,” said the insider.

The contract of CEO PSM has recently been extended for another one year as he is extending full cooperation for sale of upto 74 percent shares of PSM to the potential joint venture of local and international investors.

Sources in PC told Business Recorder that the newly appointed Chairman PC, Board, Saleem Ahmed will review the entire process of all transactions, which are on the active list of entities to be privatised.

This correspondent sent an email to Chairman PSM Board, Amir Mumtaz for his comments on third valuation of PSM’s core assets but he had not responded till the filing of this story.

Copyright Business Recorder, 2021

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