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Islamabad, October 22, 2002
Privatisation Commission has finalised a Financial Advisory Services agreement
with Merril Lynch for the privatisation of Pakistan Petroleum Limited (PPL).
Merril Lynch was the top ranked firm amongst the five firms, which
participated in the bidding process for the financial advisory services
contract. An agreement will be executed shortly in this regard.
Privatisation of PPL is a part of the process of restructuring and reform of
the Oil & Gas sector and it is included in the Privatisation Programme
approved by the Cabinet. PC is proceeding with the privatisation of PPL after
the government decided to rationalize gas prices and PPL's wellhead gas price
agreement of 1982 was replaced by a new agreement.
It is planned to divest 51 % shares of PPL within a twelve-month schedule to a
strategic investor who will acquire management control. In order to ensure
full government commitment to the privatisation before disbursing funds to the
Financial Advisor, the contract would only become effective after the
transaction structure is approved. The Financial Advisor will carry out
preliminary work on the range of options for a transaction structure that is
suitable for PPL and is in the national interest. The Financial Advisor will
also study the concept of divesting 5 % shares of PPL on stock exchange to the
small investors with a view to increase the ownership base and deepening the
capital market.