Privatisation via capital market transaction: PC issues ''Policy Guidelines''

The Privatisation Commission (PC) has issued ''Policy Guidelines'' for privatisation through Capital Market Transaction, which were approved by the Cabinet Committee on Privatisation (CCOP) in its meeting held on February 3, 2011.
The fresh guidelines state that in terms of the PC Ordinance 2000, Privatisation includes a transaction by virtue of which any property, right, interest, concession or management thereof is transferred to any person from the Federal Government or any enterprise owned or controlled, wholly or partially, directly or indirectly, by the Federal Government.
The PC is, therefore, mandated to divest title, interests, rights, ownership and control in the SOEs by means of various modes of privatisation. Section 25 of the PC Ordinance stipulates that the Commission shall carry out privatisation, in accordance with the prescribed procedure, through any of the modes, including sale of assets and business; sale of shares through public auction or tender; public offering of shares through a stock exchange; management or employee buyouts by management or employees of a SOE, lease, management or concession contracts; or any other method as may be prescribed.
Pursuant to section 25(c) stated above, the PC has been proactively pursuing a policy of supporting capital market development through the sequenced divestment of shares in state-owned companies through stock exchanges in both domestic and international markets, taking into account stock market conditions and investor demand.
In view of the foregoing, the following policy outlines were approved by the Cabinet Committee on Privatisation (CCOP) states that the privatisation policy of supporting capital market through the sequenced divestment of shares in SOEs through domestic and international stock exchanges. Divestment of SOEs through capital market transactions will add depth to the local capital market and will provide shared ownership to both retail and institutional investors.
The public offerings through stock exchanges and international listings (GDRs) will be done on case-to-case basis tailored to the circumstances of each enterprise. It is emphasised that only careful packaging, timing and sequencing can give best results. Where found expedient, the entity will be listed before adoption of the PPP privatisation mode to benefit, from among others, capital market price discovery mechanism.