ISLAMABAD: Despite the Covid-19 situation, the Privatisation Commission (PC) team, under the leadership of Federal Minister Muhammadmian Soomro continue to keep foreign investors engaged in the privatisation plan of the government.
Federal Minister Muhammadmian Soomro along with the Adviser to Prime Minister on Energy Nadeem Baber held a series of video-conferences and meetings during the current week with the pre-qualified investment parties for the privatisation of two power plants (Haveli Bahadur Shah and Balloki) of National Power Plant Management Company Limited (NPPMCL).Â
Nadeem Baber replied to questions and queries raised by the investors. The chairman NEPRA also joined the discussion. The privatisation of two power plants is being carried out on priority basis. Under the supervision of the federal minister, the impending legal and technical issues have been sorted out amicably with the provincial governments and line ministries. These include true-up tariff by NEPRA, amendment in land conversion rules and water use agreement for power plants by Punjab government and alignment of gas supply and power purchase agreements by Power Division and Petroleum Division in the context of RLNG agreements, prevalent till 2025. The relevant information has been uploaded on Virtual Data Room (VDR) for due diligence by the pre-qualified bidders. Presently investors’ due diligence is in progress, but physical site visits of the pre-qualified bidders could not be scheduled due to the current national and international lock-down situation and travel restrictions.Â
In the wake of the coronavirus pandemic, the pre-qualified bidders have asked for extension in the timelines. The federal minister has indicated to review/reconsider the timelines based on facts and situational analysis and rapidly changing national and international market scenarios.
The federal minister also reiterated that the revival of PSMC is one of the most important objectives of the Ministry of Privatisation. Financial Advisors’ Services Agreement (FASA) was signed in January this year with Pak-China Investment Company and Bank of China (BoC). The progress towards that end started on steady pace. In spite of travel advisories and other issues, and at the insistence of PC, Sinosteel team from China has recently been on visit to Pakistan. All matters regarding legal, financial and land issues of PSM have been discussed with stakeholders concerned. The first draft of HR, financial and tax due diligence has been shared by the financial advisers on April 1, 2020. The demand drafts (DDs) on HR Financial and tax have been shared with the Ministry of Industries and Production and Management of Pakistan Steel Mills on April 2, 2020 for their review and inputs before placing the DDs and proposed transaction structures for approval of the competent forum.
Likewise SME Bank privatisation is also at a conclusion stage. Pre-qualification of five investors who have submitted their statements of qualification (SOQs) is likely to be completed by next week and buyers side due diligence to be completed by end of May provided the current pandemic situation improves to some extent. Furthermore, transaction structures of Services International Hotel and divestment of Pak reinsurance shares have been finalised. However, strategy is being devised in consultation with Financial Advisers (FAs) to market both these transactions in due course of time depending on the prevailing market conditions and economic situation.
