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With an improving macro economic environment, the Government of Pakistan
("GOP") reiterated its commitment to privatise Pakistan State Oil Company
Limited ("PSO") by selling 51% equity stake in PSO, together with management
control, to a qualified strategic investor, which has received encouraging
response from fifteen quality players, which is a larger group of parties and
who are interested to explore investment opportunities in Pakistan. Dr. Abdul
Hafeez Shaikh Federal Minister for Privatisation & Investment announced here
today.
He said that it would generate interest around the globe and would give
impetuous to Pakistan's Privatisation Program and would further accelerate
the pace of privatisation of other mega public sector entities. During the
earlier attempt to privatise PSO two parties had come up while the fresh
attempt confirmed that among 15 EOIs received this time, were from most of
the committed and much better quality players, he stated.
Dr. Hafeez Shaikh said that the quality of investors has increased in the
other transactions as well, which included NRL and PTCL. In NRL 29 EOIs were
received while PTCL bagged 18 EOIs among them nine have been pre-qualified who
have started due diligence of PTCL in the Data Room.
The interested parties for PSO's strategic sale include, Kuwait Petroleum
Corporation (Kuwait), Fauji Foundation (Pakistan), Abraaj Capital Limited (UAE),
consortium of Vitol S.A (Switzerland) and Hasan Associates (Pakistan), Lukoil
International Trading and Supply Company (Russia), Dewan Mushtaq Group
(Pakistan), Dawood Hercules Chemicals Limited (Pakistan), the Attock Oil Group
(Pakistan), Abu Dhabi Group (UAE), PAL Group of Companies (UAE) / ATN Modarba
(Pvt.) Ltd (Pakistan), Al-Jomaih Holding Co. (Saudi Arabia), Chevron Texaco
(USA), Al Ghurair Investment LLC & Associates (UAE), United Bank Limited
(Pakistan), and Tysons Oil & Energy (UK). Parties, who had earlier submitted
their EOIs in response to the earlier invitation in 2002, were sent individual
letters inviting them to reiterate their interest and submit the completed
Statement of Qualifications (SOQs).
With a view to facilitate potential investors and increase competition the
date for submission of EOIs and SOQs were extended until 31 March 2005 and
15 April 2005 respectively. The parties who have not yet submitted their
Statement of Qualifications are required to submit the same by 15 April
2005. Thereafter the process of pre-qualification would be carried out
and the pre-qualified parties would be invited to conduct due diligence.
On completion of due diligence that may take three to four weeks and it
was our endeavor to hold bidding for PSO and PTCL during the current
fiscal year, which were moving smoothly, said the Minister.
PSO is the largest oil marketing company ("OMC") in Pakistan and is engaged
in the storage, distribution and marketing of petroleum products, Liquid
Petroleum Gas, Compressed Natural Gas and petrochemicals. As of 30 June 2004,
PSO has more than 3,800 retail outlets spread across the country with over 60%
market share in POL products sold. PSO's total storage capacity of
approximately 860,000 metric tones accounts for 81% of total national storage.
PSO serves a broad customer base throughout the country including the retail,
industrial, aviation, marine and Government/Armed Forces sectors. PSO's
financial summary is as follows:
Financial statistics (PKR) FY 2001 FY 2002 FY 2003 FY 2004 Gross Sales 195,039
182,323 206,376 195,110Operating Profit 4,004 4,567 6,205 6,095 Profit After
Taxation 2,251 3,188 4,030 4,212 Total Assets 30,137 32,793 32,338 42,409Total
Equity 9,808 11,253 13,063 14,160 Avg. Exchange Rate: US$1 = PKR 58.44 61.43
58.50 57.57Note: All figures in millions Replying to a question Dr. Hafeez
Shaikh said that a principal decision has been made to privatise Pakistan
Steel Mills Corporation on fast track basis and for this purpose
Privatisation Commission (PC) has invited Expression of Interest (EOI) from
reputable firms or consortiums of firms for pre-qualification to act as
Financial Advisor (FA) for evaluating the privatisation potential of Pakistan
Steel Mills Corporation (PSMC) and to lead its privatisation process, while
Mr. Zahid Aziz Chief of EAC would be the key person in PC as in house
support who has been asked to gather the transaction details. The last
date for submission of (EOI) is April 15, 2005 while last date for receiving
Request for Statement of Qualification (RSOQ) for inviting Technical and
Financial proposals from the parties is April 30, 2005 and its privatisation
is targeted for the current calendar year.
He added that Pakarab Fertilizers would be privatised prior to PSO and PTCL
while to determine the percentage for Initial Public Offering (IPO) of
United Bank Limited (UBL), schedule to be launched by end of May or early June
2005, and to obtain approval for the reference price for Carrier Telephone
Industries (CTI) the Cabinet Committee on Privatisation (CCOP) would meet
during the next week.
Responding to another question the Minister said that PC role in Stock
Market was limited under the policy, 'Privatisation for the People' to benefit
the people of Pakistan by offering them shares through IPOs at discounted
price and to broaden the base of ownership.