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A meeting of Privatisation Commission Board chaired by Dr. Abdul Hafeez
Shaikh held here today recommended the highest bid received for the sale of 90
% shares of Thatta Cement Company Limited (TCCL) for approval of Cabinet
Committee on Privatisation (CCOP), which is scheduled to meet shortly.
PC Board was informed that for the sale of 90 % shares of SCCP in Thatta
Cement Company Limited (TCCL), three parties who had submitted earnest money
worth Rs. 50 million each and which had taken part in the open bidding process
held earlier on August 28, 2003 were allowed to take part in the next round of
the bidding under CCOP's instructions with Rs. 9.05 per share as base price
for acquiring the minimum of 90 % State Cement Corporation of Pakistan's
shareholding (71,797,050 shares) in Thatta Cement Company Limited on 'as is
where is' basis. Employees & Management Group of Thatta Cement Company was
allowed by the Sindh High Court to participate in the bidding in accordance
with the rules and regulations but they failed to deposit the required earnest
money and could not take part in the bidding. PC Board recommended the highest
bid offered by Star Cotton Corporation of Rs. 10.85 per share as acceptable
for approval of the CCOP.
10 % shares of TCCL have been allocated for the employees and in case the
employees fail to get this chunk then the successful buyer is bound to pick
up these shares on the same price per share already offered by him for Rs.
86.5 million. In addition to this the successful buyer will pay about Rs
77.1 million as Golden Hand Shake/ V H Scheme and he will also pay a loan of
Rs. 247. 6 million to SCCP. The payments to be made by the buyer for this
transaction come to Rs. 1.19 billion.
The parties included Al-Abbas Group of Companies, Karachi, Haji Saifullah &
Group, Islamabad and Star Cotton Corporation (Pvt) Ltd, Karachi. Star Cotton
Corporation remained the highest bidder with an offer of Rs. 10.85 per share
making a total offer for 90 % shares of TCCL as Rs. 778. 997 million. This
group was third during the earlier bidding round held on August 28, 2003
with an offer of Rs. 6. 30 per share. Haji Saifullah & Group made an offer
of Rs. 10. 75 and stood second while Al-Abbas Group of Companies was third
with an offer of Rs. 9. 95 per share.
The meeting was also informed that the amount received in excess of the
required Rs. 604 million for the third Public Offer of 13.1 million shares
of National Bank of Pakistan (NBP) had been refunded to the applicants.
Privatisation Commission received applications worth Rs. 1.22 billion, which
was double the required amount in response to its offer to the general public.
Subscription for this issue was scheduled during October 13-15, 2003.
The government had offered 13.13 million shares of NBP to the public at a
price of Rs.46/= per share. Applications were invited in lots of 500 shares or
multiples thereof. Preference for allocation was given to the smaller
applicants for 500 shares. The remaining shares had been allocated to
applicants on prorata basis, the meeting was informed.
The PC Board while reviewing the progress of KESC and HBL was informed that in
response to the invitation to the investors on September 29, 2003 the
Privatisation Commission ("PC") had received five Expressions of Interest
("EOI") from reputed utility operators and strategic and financial investors
interested in acquiring up to 73% of the equity in Karachi Electric Supply
Corporation (KESC), with management control by the due date. Asian Development
Bank has already indicated that it may be willing to take an equity interest
in KESC of 7.67% from the available 73% at privatisation.
The parties/consortium of parties submitting the EOIs include 1. ABB (Pvt)
Ltd, USA-Pakistan, 2. Corner Stone Partners LLC, USA, 3. Hasan Associates
(private) Limited Consortium including Al Bayarak Al Baida Co., Kuwait; and
IOSKOM, Turkey, 4. Independent Power Corporation PLC, UK and 5. Kanooz Al
Watan for Project LLC, Saudi Arabia.
The GoP has undertaken to continue with the approved current investment
programme (until June 2006) to upgrade the transmission and distribution
system and to underwrite the formula based tariff regime as determined by the
Regulator, National Electric Power Regulatory Authority (NEPRA), in September
2002. Parties with relevant credentials who have submitted EOIs will be
dispatched Request for Statement of Qualifications (RSOQ).
While reviewing the present status and the progress of Habib Bank Limited (HBL)
privatisation, the meeting was informed that the potential bidders were in the
process of completing their due diligence. A meeting was held with the
potential bidders and the matters to take the transaction forward
towards bidding point were discussed in detail. HBL is Pakistan's second
largest commercial bank, having a countrywide and international branch
network. HBL has full service licence covering commercial, retail banking,
consumer and investment banking activities in Pakistan and most of the other
countries where it is present.HBL has an extensive domestic network consisting
of 1,425 branches with a market share of approx. 20%.
Earlier, addressing the PC Board Dr. Abdul Hafeez Shaikh, the Federal Minister
for Investment & Privatisation directed the Privatisation Commission not to
compromise on transparency and national interest while designing or
structuring the transactions for investor's comfort.