CCoP approves 7pc stake sale in OGDCL; 10pc in PPL

ISLAMABAD: The Cabinet Committee on Privatization (CCoP) on Friday approved divestment of up to 7 percent of its stake in state-owned Oil and Gas development Company (OGDCL) and up to 10 percent in Pakistan Petroleum Limited (PPL).

“These transactions will be executed one by one,” an official of the Privatization Commission told The News.

A statement said the CCoP approved the divestment of government-owned shares in OGDCL through public offerings and “directed to initiate the process of appointment of financial adviser for the process”.

“Up to 10 percent government shares in PPL through Public offerings was also approved by CCOP,” the statement added.

The government initially planned to divest its stakes to strategic investors, especially international exploration and production companies. It believed that the option will increase non-tax revenue to be used for retiring the swelling public debts, and will also bring best industry practices and knowledge in the larger interest of these companies.

However, the Privatization Board suggested that seven and 10 percent chunk are too small to attract foreign strategic investor and also recommended divestment through public offering, the commission’s official said.

He said the CCoP, in last August, decided to divest up to seven percent shares of the OGDCL. Later in February this year, the committee directed stakeholders to discuss and submit recommendation on the proposed divestment of OGDCL shares after the Prime Minister Imran Khan stressed privatisation process to accelerate.

The statement said the CCoP also gave approval for the privatization of Guddu Power Plant (747 MW) and gave directions to all the divisions/entities for resolving issues of Guddu Power Plant to facilitate the privatization process.

The statement said the CCoP directed to hold global accounting firm Deloitte’s report on privatization of Roosevelt hotel. “On the recommendation of the Aviation Division, CCoP directed that on Hotel Roosevelt Manhattan, updating of Deloitte reports may be held in abeyance till the revival of the economic and business environment in Manhattan, New York,” the statement said.

“The report updation will also cost fee of 30k-35k while the overall business environment in prevailing in Manhattan is not favorable (as of lesser use now), it was briefed to the CCoP.”

The committee also approved transaction structures for privatization of Services International Hotel, Lahore, Jinnah Convention Center, divestment of up to 20 percent shares of Pakistan Reinsurance Company Limited held by government, House Building Finance Company Limited and First Women Bank limited.