The Privatisation Commission (PC) board on Friday deferred approval of transaction structure for the sale of Pakistan Steel Mills (PSM) owing to differences over classification of its core and non-core assets, which will be handed over to the new buyer, according to a report by The Express Tribune.
The board could not take a decision after it found that some of the operating assets had been described as non-core assets by the valuator, Joseph Lobo, the report said quoting a senior official of the Privatisation Ministry.
The classification of assets by the valuator varied from the audited financial statement of PSM.
Board members were also divided on whether the government should sell up to 75 per cent assets being transferred to a new PSM subsidiary – Steel Corp Private Limited – or opt for the sale of 100pc stake.
“Matters leading to the filing of the Scheme of Arrangement with SECP were discussed in the (board) meeting, which included updated financial reports of PSMC and its subsidiary, approval of the board for transferring utility connections to the newly formed subsidiary without encumbrances, approval for retention of the new subsidiary either by the Ministry of Industries or PSM and the potential size of divestment among others,” said a brief statement issued by the privatisation ministry after the meeting.
Board Chairman and Federal Minister for Privatisation Mohammad Mian Soomro stressed that they were resolving pending matters in collaboration with the main stakeholders and Expressions of Interest (EOIs) would likely be invited by the end of July.
The board was informed that the new subsidiary, Steel Corp Private Limited, will have authorised capital of Rs150 billion and paid up capital of Rs1 billion.
It may be noted here that the PSM board has approved tentative core land of 1,228 acres and its right of use will be awarded without entering into a lease agreement as per the standard terms to subsidiary until the strategic partner comes in. The draft land lease deed has been prepared by the advisors and shared with privatisation ministry.
