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The Initial Public Offering (IPO) for sale of the shares of Oil & Gas
Development Company Limited (OGDCL) will increase the market capitalization by
at least Rs. 137.6 billion, which is more than US $ two billion thus
increasing the capitalization to about US $ 20 billion.
This was stated by the Federal Minister for Privatisation & Investment Dr.
Abdul Hafeez Shaikh while addressing the first presentation to the investors
for the Initial Public Offering (IPO) of 2.5 % shares (107.5 million shares)
of Oil & Gas Development Company Limited (OGDCL) with a green shoe option of
additional 2.5 % shares here today.
He said that it was the largest listed company in the stock market after
PTCL, which would add significant depth to the Stock Market. Also being the
second Exploration & Production company listing in Pakistan had already
generated huge interest, which was targeted by the end of this month, the
Minister said.
He added that realizing Rs. 6 billion plus through the divestment small number
of shares of POL, ARL and DG Khan Cement in the early months of the newly
elected government was a record and we were looking eagerly to implement this
strategy, which was the most transparent way for privatisation and which would
further develop the market and broaden the
base of ownership. Preference would be given to all the smaller applicants
including the employees of 1000 shares in OGDCL and 500 shares in NBP, he
stated and hoped that NBP's 3.2 % shares would fetch about half billion
Rupees.
He further stated that in a well sequenced program this process would
continue by the end of the current calendar year, which included offer of sale
of shares of SSGC and PIAL. The further divestment of the shares of the public
sector entities for the first quarter of 2004 would be announced accordingly,
he said.
The Minister said that we were progressing ahead with the privatisation
process of PSO, HBL, NITL, FESCO, JPC, Thatta Cement and Hyatt Regency Hotel
Project all to be completed within this year.
Addressing on this occasion Mr. M Abdullah Yusuf, Secretary Petroleum &
Natural Resources said that the government was endeavoring to open up this
sector by giving complete autonomy to the public sector companies like OGDCL,
which enjoyed fully authority management with independent Board of Directors.
Pakistan's gas production had increased to 50 % with 3 billion mmcf
production, which would touch the figure of 4 billion by the end of the
current year, he informed. Despite post 9/11 issue, tension on our borders and
war in Afghanistan the investment in this sector did not stop and the most
pursued companies for privatisation were from the Oil & Gas sector, he added.
The Chairman OGDCL Mr. Afzal Khan said that after adopting the open pricing
policy there was no risk from the government to control the price. OGDCL had
last year contributed Rs. 33 billion to the national exchequer, which proved
it as a mature company and its exploration activity had now been accelerated,
he added.
Mr. Najam Kamal Hyder, MD, OGDCL said that we had aggressive and bullish
exploration plan and our production and profits had increased, with low
operating cost.
Mr. Ahmad Waqar, Secretary Privatisation Commission while replying to a
question said that the Financial Advisor for OGDCL had started soft marketing
for the strategic sale of OGDCL as a parallel strategy, which would be cleared
by the end of the year.
Earlier, Mr. Azhar Iqbal of KASB Securities, the Lead Managers for offer of
sale of OGDCL shares gave a detailed presentation highlighting the profile and
salient features of the company and informed that the offer had been fixed for
Rs. 32 per share to be offered through Karachi, Lahore and Islamabad Stock
Exchanges.
The Cabinet Committee on Privatisation (CCOP) gave approval on September 27,
2003 in a meeting held under the chairmanship of the Finance Minister Mr.
Shaukat Aziz, to the initial public offering (IPO) of 2.5 % shares of Oil &
Gas Development Company Limited (OGDCL) at a price of Rs.32 per share with a
green shoe option of another 2.5 % shares. The divestment of shares through
Stock Exchange would help in broadening and deepening the stock market and to
transfer the benefits of privatisation to the common man in the most
transparent way.