PC TO LAUNCH KAPCO IPO SOON AFTER RAMADAN- Dr. Hafeez Shaikh

Islamabad, October 25, 2004

Dr. Abdul Hafeez Shaikh Federal Minister for Privatisation & Investment has directed the Privatisation Commission to make the Initial Public Offering (IPO) of 20 % shares of Kot Addu Power Company (KAPCO) to the general public through Karachi, Lahore and Islamabad Stock Exchanges soon after Ramadan with preference to smaller applicants in line with the government's policy of 'Privatisation for the People'. He was chairing a meeting to review the progress and the status of the privatisation process of various on going and upcoming Public Sector entities. The issue being attractive for the investors in line with earlier transactions like OGDCL, SSGC and PPL would  also receive overwhelming response, he hoped.

The Minister said that KAPCO, with strong fundamentals and sound operational record, would increase market capitalization significantly and would bring a worthwhile addition, rather a leader, to the power sector companies listed on the Stock Exchanges. The large quantity of shares offered would also add to the liquid share float in the market, he added.

KAPCO, with a power generation capacity of 1600 MW, was privatised in 1996 with the transfer of management control to M/s International Power plc. The government realized proceeds worth Rs.9 billion through this divestment and now holds 64 % of KAPCO's total 880 million issued shares.

Dr. Hafeez Shaikh directed the concerned officials to maintain the momentum of such public offerings with proper sequencing and to ensure the early completion of IPO's of United Bank Limited, State Life Insurance Company (SLIC) and Pakistan Steel Mills shares. The government was determined to continue with such public offerings to transfer the benefits of privatisation to the common man and to make them partners in the ownership of Public Sector Entities, he said.

The Minister said that the interest of the employees will be safeguarded while privatizing Karachi Electric Supply Company (KESC) and their genuine concerns will be addressed accordingly. All out efforts were also being ensured to facilitate the prospective bidders for the transparent bidding of KESC, he added.

The meeting was informed that in response to the final invitation to the qualified strategic investors, consortia of strategic/ financial investors interested in acquiring 51 % interest in Jamshoro Power Company (JPC) including management control 11 Expression of Interest (EOI) have so far been received while the last date to receive EOIs and the submission of SoQ is November 30, 2004. Parties with relevant credentials submitting EOIs have been dispatched Request for Statement of Qualification (RSOQ). Parties who have already submitted EOIs and have been pre-qualified need not apply afresh. Jamshoro Power Company Limited holds properties, rights, assets and liabilities of two power stations, Jamshoro, an 880 MW gas and furnace oil-fired power plant and Kotri, a 174 MW gas fired power plant. The assets  are strategically positioned in Pakistan Grid. The Jamshoro facilities are located 18 km from Hyderabad and 165 km North East of Karachi while Kotri facilities are located within the environment of Hyderabad.

The Minister also directed to expedite the privatisation of CTI. It may be recalled that 53 % shares (approximately) held by Pakistan Telecommunication Company Limited (PTCL) in Carrier Telephone Industries (CTI) have been offered for sale on as 'a going concern' basis with management control. The parties who had submitted their EOIs for CTI include (i) Saif Telecom Limited, (ii) Consortium of Crescent Standard Business Management (Pvt.) Ltd., Simcon International (Pvt.) Ltd., CTI Executive Association (regd.) & CTI Workers Union, (iii). M/s Siemens, (iv) Aqeel Karim Dhedhi Securities (Pvt.) Ltd. and (v) Northern Engineering Corporation. CTI's principal business is manufacturing of transmission equipment for telecommunication services and equipped with the state-of-art machinery, which include Digital Microwave Radio, Mux for Optical Fiber, Rural Digital Branch Exchange, Single Channel VHF Radio. CTI is located at Industrial Area Sector: I-9/2, Islamabad. The meeting also reviewed the progress and the status of the privatisation process of FESCO, OGDCL, PSO, PTCL, SNGPL, SSGC, Pakarab Fertilizers and IAL.