Govt allows hiring of financial advisers for PPL’s divestment

ISLAMABAD: The government has approved appointment of financial advisers for the divestment of up to 10 percent of government stake in Pakistan Petroleum Limited (PPL).

The privatisation board took the decision in a meeting presided over by the Minister for Privatisation Mohammedmian Soomro, a statement said on Thursday.

The board discussed divestment of the government shares in PPL and up to 7 percent shares in Oil and Gas Development Authority (OGDCL). It was decided to proceed for hiring of financial advisers consortium for the divestment of shares in PPL. Moreover, proposals from financial advisors consortium will be obtained for documented as well as undocumented modes of transactions. The process for financial advisors consortium hiring for OGDCL will commence once the hiring of financial advisors consortium for PPL is completed.

The board also approved the transaction structure for the revival of state-owned Pakistan Steel Mills (PSM), which has not been operational since June 2015. The transaction structure approval was agreed in principal and financial adviser was asked to move ahead with procedural follow-up processes expeditiously.

“The transaction structure approved by the board of privatization commission will be presented to the cabinet committee of privatization for approval,” said a statement.

PSM was one of the premier state owned enterprises, which started its commercial operations in early eighties and played a pivotal role in the economy of the country when it was fully operational. The mills had around 15,000 employees at the time of its closure.

The terms of reference for hiring of financial advisers for New York-based Roosevelt Hotel, owned by Pakistan International Airlines were also deliberated upon by the board members.

The board decided to re-invite the expressions of interest for hiring of financial advisers for the privatisation of Guddu Power Plant due to exorbitant financial bid submitted by the top rank consortium earlier.

The privatisation commission board also decided to re-invite the expression of interest for the appointment of financial advisor consortium for the privatisation of Sindh Engineering Limited. The previous shortlisted top ranked consortium was insisting on changes to the agreed financial services agreement, including changing the transaction scope and payment terms, which could not be accepted by the privatisation commission.

The board forwarded the issues of the Water and Power Development Authority-owned property in Swat to the cabinet committee on privatisation.

The ministry of privatisation is going to commence the auction of properties owned by the federal government from September.

The privatisation minister said the commission is fully geared up in achieving the objective of expediting the privatisation of state-owned enterprise to mitigate the drain of these enterprises on the government budget. This is the seventh transaction approved since the start of the privatisation plans adopted in October 2018 and the privatization commission will be focusing to complete these transactions along with other transactions which are currently in progress.

In another meeting, the privatisation minister said long standing matters of K-Electric are on right track to be settled with all stakeholders’ participation. The long standing matters were discussed and an inter-ministerial committee under the chairmanship of the minister for privatisation was formed and a large numbers of meetings were held consistently and matters relating to deed of undertaking, deed of extinguishment and payables and receivables of K-Electric were discussed and moving towards settlement.

The meeting was told that the privatisation of 19 entities is processed simultaneously. “There is no denying the fact that the privatisation process logically is time consuming as there are rules specified and gestation period for an entity to be privatised,” said the minister.