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The Initial Public Offering (IPO) of Kot Adu Power Company (KAPCO), which
remained opened for four days will raise the number of beneficiaries, the
common citizens of Pakistan, under the slogan 'Privatisation for the People'
from 450,000 to 750,000. Dr. Abdul Hafeez Shaikh Federal Minister for
Privatisation & Investment stated this while talking to media after the
signing ceremony of the Conveyance Deeds, Share Purchase Agreement of
Faletti's Hotel here today.
The Minister said that as per initial reports the response to KAPCO offer
would prove to be unprecedented, which would benefit around 316,000 small
applicants. The government would continue the divestment of GoP shares in the
public sector entities to benefit small applicants with proper sequencing and
interim of eight to ten weeks, which included IPO of State Life
Insurance Company (SLIC), United Bank Limited (UBL) and Secondary Public
Offering of OGDC, he said.
He termed the completion of the privatisation process of Faletti's Hotel as an
encouraging development, which would give boost to the tourism industry with
the construction of a world-class quality hotel. This transaction augurs
well for future investments in the hospitality/ tourism industry.
Furthermore, this successful transaction was symbolic of the fact that
investor's perceptions about Pakistan have improved significantly, he added.
The representative of the successful buyer Mr. Javed Qureshi said that the
completion of transaction reflected the confidence of the private sector in
the economic policies of the government and lauded the transparency maintained
by the Privatisation Commission during the process. The design work has been
assigned to a foreign company for building Pakistan's the biggest Hotel
project and groundbreaking ceremony was expected to take place before June 30
this year, he said.
Earlier, the new owner signed sale deed agreement with AHP and the
representative of LDA and the Revenue department of Government of Punjab.The
Faletti's Hotel, Lahore is a historical landmark, situated in the commercial
and business centre of Lahore on an area of approximately 68 kanals.
Faletti's Hotel was established in British India in 1880. It has 44
residential rooms, banquet halls, restaurants etc. The highest bid for this
Hotel of Rs. 1211.1 million by 4 B Marketing was approved by the CCOP on May
31, 2004 and the PC issued a Letter of Acceptance to the Successful Bidder on
June 2, 2004. The payment of the Sale Price by 4 B Marketing to the PC was
made on July 2, 2004.
Privatisation Commission initiated the process of privatisation of Faletti's
Hotel on August 21, 1997. An Agency Agreement was made on January 9, 1998 by
and between Associated Hotels of Pakistan, a public limited company
incorporated in 1961 and the Ministry of Finance, acting for and on the behalf
of the Government of Pakistan through the Privatisation Commission. By the
agreement AHP appointed PC as the agent to market, advertise and sell
Cecil's, Deans and Faletti's Hotel. (PTDC holds 86.8% of the share holding of
the three hotels whereas private investors hold the balance. AHP hotels were
on a lease to PTDC for a period of 50 years at an annual payment of Rs. 1
million since 1992).
Privatisation of Faletti's Hotel was attempted earlier and bidding was held
twice in 1998 and 2002. All these attempts failed on account of lower bids.
The PC in December 2003 reinitiated the process and the hotel was brought up
for bidding for the third time on an 'as is where is basis' by advertising in
the national press soliciting Expressions of Interest. The privatisation of
Faletti's Hotel will ensure that an important cultural and historical landmark
of Lahore will become operational in about three years time thereby
revitalizing the dead assets lying unused in the heart of Lahore.