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Islamabad, September 23, 2002
The Cabinet Committee on Privatisation (CCOP) has approved the bids received
for Thatta Cement Company Limited, 28 % equity stake in Bank Alfalah and
Investment Corporation of Pakistan (ICP) Mutual Fund-LOT-A in a meeting, which
met under the Chairmanship of Federal Minister for Finance Mr. Shaukat Aziz
here today.
Total proceeds for sale of Thatta Cement will be Rs.718 million. In addition
the new buyer would pick up debt liability of Rs.383 million. Provision for
Golden Handshake for the workers to the tune of Rs. 109 million has been made
out of which the new buyer will be liable to pay Rs. 54.5 million. Iqbal
Alimohammad & Consortium gave the highest offer in an open bidding on
September 7, 2002.
The highest bid of Rs. 27.56 per share against the floor price of Rs. 26.56
per share for the remaining 28 % shares (21 million) offered by Abu Dhabi
Group (UAE) was also approved. They had acquired Bank Alfalah (former Habib
Credit & Exchange Bank) in 1997 through an open bidding. Remaining 2 % shares
are reserved for employees and in case they do not take up, the new buyer
would have to pick up the remaining shares. Total sale proceeds for this
transaction are Rs.620.1 million.
The highest bid for the management rights of Investment Corporation of
Pakistan's Lot-A Mutual
Funds offered by ABAMCO Limited of Rs. 175 million was also approved. The
meeting also approved the inclusion of Kohi Noor Oil Mill in the Privatisation
Program and the divestment of GOP's remaining shares of Pakistan Oilfields (POL)
and Attock Refinery Limited (ARL) through the Stock Exchanges.
The meeting noted with satisfaction the confidence shown by the investors in
the investment climate in Pakistan. Acquisition of UBL by a consortium of
overseas Pakistani group in partnership with Middle Eastern investors will
send a strong signal to other overseas Pakistani groups to look at investment
opportunities in Pakistan. This is the largest investment by any overseas
Pakistani in the country. Moreover, such large investment just before the
October 2002 elections demonstrates the investors confidence in continuation
of policy of privatisation
in Pakistan.
Similarly investment by local investors in Thatta Cement is evidence of
revival of investor's confidence in the country's economic situation and
improving law and order situation.
Disinvestment of Lot-A of ICP Mutual Funds and transfer of management rights
to a quality investor is a corner stone transaction and will open
opportunities for the transfer of NITL and other ICP Funds.
The Cabinet Committee noted with great satisfaction that the recently
concluded privatization transaction of UBL, ICP Lot-A, Remaining GOPs shares
in Bank Alfalah, Thatta Cement open a new era of local and foreign investments
not only through acquisition of state assets but also for setting up fresh
projects.
The meeting was informed about the offer for sale of 5 % additional shares of
National Bank of Pakistan (NBP) with a green shoe option of another 5 % in
case of over subscription at Rs. 21 per share. A road show for shares offer
for sale has been planned at Karachi Stock Exchange on September 24, 2002.
The Committee also appreciated the Annual Report prepared by the PC and
commended the work done for its finalization. The Committee observed that this
and such future Reports would make the job/ work of Privatization Commission
more transparent and open up a debate, which can help Privatization Commission
in improving its operations.
While reviewing the final report, the Cabinet Committee noted that the pace of
privatization since the present government took over in October 1999 had
picked up despite the setback of 9/11. Privatisation Commission was able to
raise Rs.35 billion since October 1999 todate compared to Rs.59.5 billion
raised from November 1991 to October 1999. From 1996-1999 only Rs. 2.35
billion were raised and when the present government took over, the pipeline
was empty. The process of privatisation was started afresh and has picked up
momentum inspite of various shocks to the economy.
The Cabinet Committee noted that several other bid transactions are in the
offing like OGDCL, PSO, PTCL and KESC, which are in advanced stage and coming
to maturity in the period October 2002-January 2003.