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The Cabinet Committee on Privatisation (CCOP) which met here under
chairmanship of Mr. Shaukat Aziz, Federal Minister for Finance approved the
restructuring and sale of additional shares of Allied Bank Limited (ABL),
allowed sale of 10 % shares retained for employees of privatised units and
viewed the preliminary results of the Initial Public Offering (IPO) of
Pakistan Petroleum Limited (PPL) shares.
CCOP approved the highest bid of Rs. 14.2 billion given by the consortium of
Ibrahim Leasing Limited and Associates for acquiring 325 million additional
shares in ABL which constitute 75.35 % of the revised capital. The transaction
for the sale of shares of ABL is solely for the sake of reconstruction of its
capital base and the amount so generated will be injected in the Bank to raise
its capital. After injection of this capital, the Capital Adequacy Ration
(CAR) of the Bank will increase to allow the bank to increase its activities.
The sale of shares of ABL through reconstruction of its capital under
section47 of the Banking Companies Ordinance, 1962, is a land mark
transaction, as the bank has been successfully recapitalized without any
injection of funds by the Government of Pakistan or State Babk of Pakistan.
The entire transaction, from inviting EOIs to the bidding held yesterday, has
been done in a highly transparent manner by the State Bank of Pakistan, which
was acknowledged by all the bidders.
Approving the decision the Finance Minister directed SBP to ensure that the
remaining part of transaction should also be done in a transparent manner. To
this end, SBP should ensure that no funds from ABL should be involved directly
or indirectly in the completion of the transaction.
The Minister said it is good sign that additional shares of ABL have been
acquired by a reputed local business group of the country, which is a
reflection of the investor's confidence in Pakistan and will ensure that
dividends from ABL will be retained in Pakistan. The decision will be
submitted for information to the next ECC meeting.
The CCOP approved the preliminary transaction structure for the
privatisation of Pakistan Petroleum Limited (PPL). The Committee was briefed
about the overwhelming response by the small investors to the recent IPO of
PPL shares. The Minister noted with satisfaction that the offering had been
oversubscribed according to interim information received from the banks and
the benefits would be passed on to a large number of small investors. Mr.
Shaukat Aziz observed that the Public Offering of PPL would also significantly
add to the market capitalization, broaden and further strengthen the base of
the Stock Market.
CCOP also gave approval for the sale of 10 % shares of privatised units
retained for employees to benefit approximately 1500 workers. The units
include Kohat Cement, Dandot Cement, Ghribwal Cement and Ittehad Chemicals.
The 10 % shares would be offered at 50 percent discount of the prevailing
market price to those employees of these privatised units who had not accepted
the VSS/GHS schemes.
The CCOP reviewed the progress of the privatisation process of various public
sector entities and gave necessary instructions to accelerate the pace of
privatisation process. The CCOP constituted a meeting under the chairmanship
of Dr. Abdul Hafeez Shaikh Federal Minister for Privatisation & investment to
review issue raised by the prospective bidders for FESCO and other Power
Sector entities and provide maximum comfort to the investors to complete these
transactions. The Federal Ministers and senior officials of Finance,
Information Technology & Telecommunications, Petroleum & Natural Resources,
Privatisation & Investment, Labour Manpower & Overseas Pakistanis, Water &
Power, Industries & Production, Defense, Culture & Tourism, Securities
Exchange Commission of Pakistan and PC attended the meeting.