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Update on Privatisation
In the aftermath of the September 11 events, the Government’s commitment to
privatisation has not wavered. However, several large transactions with foreign
interested parties that were to come up for bidding during the last quarter of
2001 have been postponed by three or four months at the request of some of the
parties who had submitted expressions of interest (EOIs) and/or at the advice of
the Financial Advisor. These include PTCL, Government’s minority working
interest in nine oil and gas fields, United Bank Limited, National Power
Construction Company, Pak Saudi Fertilizers and Faletti’s hotel.
Others have been offered or are being offered for bidding with little or minor
delays. These include the LPG assets of SNGPL (sale agreement signed in
October), Lasbella Textile Mills, the meter manufacturing unit of SSGC, and
minority share sales of Muslim Commercial Bank Limited (all in November), PECO
Badami Bagh, an office building of Republic Motors, Bolan Textile Mills, and
Hyatt Regency Hotel (all in January).
Preparation for the larger units that were expected to be bid during the first
or second quarter of 2002 is largely on schedule, with minor delays due to
restrictions on financial advisors in travelling to Pakistan (PSO and KESC),
difficulties in hiring new financial advisors because of the regional
uncertainties and travel restrictions (Habib Bank, Sui transmission and
distribution companies, Jamshoro, and FESCO), difficulties in taking unpopular
pricing decisions (PPL) and greater than expected complexities during
preparation (OGDCL). The delay in selling Pak Saudi Fertilizers has also delayed
the planned sale of Pak-Arab Fertilizers, which is now expected to be bid in
mid-2002.
The regional situation, especially as it relates to Pakistan, is expected to
become much more stable by early next year and all the above transactions are
expected to close or reach the point of sale during 2002.