The Privatisation Commission’s Board on Tuesday approved a thirty-year transaction structure proposed by its financial advisors for the restructuring of Pakistan Steel Mills (PSM).
The decision was taken during the PC board meeting.
The proposed structure, which is set to be presented to the Cabinet Committee on Privatisation (CCoP) in coming days, includes a tripartite concession agreement between the government, PSMC and the investor for a period of 30 years on the basis of revenue sharing.
PSM’s land will remain with the government while the plant and machinery will be handed over to the new company for a maximum period of 30 years, and no asset of PSMC will be sold.
The board also approved the transaction structure of SME Bank which includes a sale of 93.88 percent shareholding of the government of Pakistan. Based on the proposed structure, the State Bank of Pakistan is to allow a reduced Minimum Capital Requirement (MCR) of Rs 6 billion on staggered basis over five years, with Rs 2 billion upfront and Rs 1 billion each for next four years.
The SBP will also issue a new banking license of a specialised nature with at least 60 percent advances for the SME sector to the investor while also allowing Capital Adequacy Ratio (CAR) at 10 percent for five years post-privatisation.
Based on the request from Ministry of Information, PC board agreed to delist Shalimar Recording and Broadcasting Company from the privatisation program, while it agreed to constitute a committee to evaluate the viability of delisting Sindh Engineering Limited (SE) which has been requested by the Ministry of Industries and Production.
The committee will assess the legal status of the SE assets and provide a comparative analysis in the case of privatisation and restructuring or delisting of the entity.
The board also approved the initiation of the process for hiring of Financial Advisors for Pakistan Re-Insurance Company, National Insurance Company and Heavy Electrical Complex (HEC). It also approved the initiation of a capital market transaction of the OGDC shares up to a maximum of 5 percent.
