PC approves transaction structure for revival of PSM

ISLAMABAD: The board of Privatisation Commission (PC) has approved the transaction structure for the revival of Pakistan Steel Mills Corporation (PSMC) which has not been operational since June 2015.

The decision was taken by the commission in a meeting chaired by Federal Minister for Privatisation Mohammed Mian Soomro in Islamabad. The meeting was attended by the board members and senior officials of the ministry.

In the meeting, various matters relating to Pakistan Steel Mills, the status of hiring of Financial Advisory Consortium for Roosevelt Hotel, offloading of Oil and Gas Development Company (OGDCL) and Pakistan Petroleum Limited (PPL) shares, Guddu power plant and Sindh Engineering Limited were discussed.

The PSMC was one of the premier state owned enterprises which started its commercial operations in early eighties and had played a pivotal role in the economy of the country when it was fully operational. The transaction structure approval was agreed in principal and financial adviser was asked to move ahead with procedural follow up processes expeditiously.

The transaction structure approved by the PC board will be presented to the Cabinet Committee of Privatisation for approval.

The Terms of References (ToRs) for the hiring of financial advisors for Roosevelt Hotel, owned by Pakistan International Airlines (PIA) were also deliberated upon by the board members.

They discussed divestment of up to 10 per cent of the government shares in Pakistan Petroleum Limited (PPL) and up to 7 per cent shares in OGDCL.

After extensive discussion on transaction fundamentals, market conditions and Pros and Cons of various options the board decided to proceed for the hiring of Financial Advisors Consortium (FAC) for divestment of 10 per cent of GOP shares in PPL.

Moreover, proposals from FAC will be obtained for documented as well as undocumented modes of transactions, the process for FAC hiring for OGDCL will commence once the hiring of FAC for PPL is completed.

PC board decided to re-invite the expressions of interest (EoIs) for the hiring of financial advisers for the privatisation of Guddu power plant due to exorbitant financial bid submitted by the top rank consortium earlier.

The commission 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 shortlisted 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 also considered the WAPDA-owned property in Swat and Khyber Pakhtunkhwa (KP) and decided to refer 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 from September 7.

Privatisation minister said that the commission is fully geared up in achieving the objective of expediting the privatisation of state-own enterprise to mitigate the drain of these enterprises on the government budget.

This is the seventh transaction approved since the start of the privatisation plans adopted in October 2018 and the commission will be focusing to complete these transactions successfully along with other transactions which are currently in progress.

Earlier in the day, privatisation minister ensured in another meeting that long-standing matters of K-Electric (KE) are on right track to be settled with all stakeholders’ participation.

He added that the long-standing matters were discussed and an inter-ministerial committee under the chairmanship of the privatisation minister was formed and several meetings were held consistently and matters relating to the deed of the undertaking, deed of extinguishment and payables and receivables of  K-Electric were discussed and moving towards settlement.

It is a good sign that the privatisation of 19 entities is processed simultaneously, the largest ever by the privatisation ministry, and there is no denying the fact that the ongoing process logically is time-consuming as there are rules specified and the gestation period for an entity to be privatised.