Govt approves financial advisers for OGDCL, PPL divestment

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ISLAMABAD: The Privatisation Board on Tuesday approved financial advisers for divestment of shares in Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL).

Federal Minister for Privatisation Mohammadmian Soomro chaired the meeting attended by members of Privatisation Board, federal secretary, senior official, National Electric Power Regulatory Authority (NEPRA) representative, Ministry of Finance, Ministry of Power and financial advisers attended the meeting.

The commission had invited Expressions of Interest (EoI) for the appointment of financial advisory consortium two months ago to divest the 7 per cent shares of the OGDCL as well as 10 percent share of PPL.

Rumors had dominated the stock market last Wednesday as the government finalised the privatisation of OGDCL and consortium of OGDCL advisers. Initially, its share price went down by almost 5pc.

OGDCL is a debt-free company, contributing Rs160 billion to the national exchequer. The government holds 74.97% interest while 10.05% with Benazir Employees Stock Option Scheme. Its net sale is Rs261.481 billion and profit after tax is Rs1178.3bn during FY 2018-19.

On the other hand, the government also holds 67.5pc shares while 7.4pc are held by Benazir Employees Stock Option Scheme and their remaining 25pc shares had been offered for free float.

In addition to this, the meeting has also recommended prequalification of the potential investors who have submitted Statements of Qualification (SOQs) for the privatization of National Power Parks Management Company (Pvt) Ltd (NPPMCL).

Amid potential buyers are twenty-three investors, including entities that have never invested in Pakistan before, who have submitted SoQs for the NPPMCL privatization.

Out of 23 parties that submitted EoIs, 12 parties submitted their Statements of Qualification (SOQs) by the deadline. Some of the parties who submitted their SOQs also expressed their interest to form consortia with some of the other parties that had submitted EOIs.

During the meetings, the technical, financial, management and legal capabilities of the parties that submitted their SOQs along with their organisational structure, were discussed with all the stakeholders.

The board approved following twelve parties: Jera (Japan), Marubeni (Japan), Mitsui & Co (Japan), Asma Capital (Bahrain), Nebras Power (Qatar), Qatar Investment Authority (Qatar), the Fauji Foundation consortium(Pakistan), Edra (Malaysia), GPSC (Thailand), Contour Global (UK) and KAPCO and Atlas Pakistan.

The prequalified parties will commence due diligence of the power plants promptly with a view to achieving the earliest possible date for bidding and closing of the transaction timely.

The board also recommended transaction structure on sale of unproductive land owned by the federal government entities for submission to the Cabinet Committee on Privatization on CCOP. Sources said that the government can earn Rs 5 billion by selling off twenty-seven properties located in different cities.

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