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The Privatisation Commission (PC) initiated the formal process for the
privatisation of Pakistan Steel Mills Corporation (PSMC) with a kick off
meeting chaired by Mr. Tahsin Khan Iqbal Secretary PC at PSMC Bin Qasim,
Karachi today.
The meeting reviewed the transaction structure and other steps regarding the
privatisation process of PSMC and decided to ensure the timely completion of
the transaction as already targeted by December 31, 2005. Chairman PSMC Lt.
Gen. (Retd) Abdul Qayyum and the senior officials of PC also attended
the meeting. The Financial Advisor for PSMC gave a bird's eye view of the
plant including brief history, operational efficiency and detailed balance
sheet. Participants of the meeting visited few plants of PSMC.
The government has decided to privatise PSMC by offering 51 % to 74 % equity
stake with management control to a strategic investor through a transparent
and competitive process. It is inline with the government's endeavor to
promote the development and modernization of the steel sector through
liberalization, deregulation and private sector participation.
The PC has recently appointed Citigroup Global Markets Limited, UK to act as
Financial Advisor along with a consortium of technical, legal and accounting/
tax/ HR advisors comprising respectively Corus Consulting Limited, Orr Dignam
& Co and A.F. Ferguson & Co.
PSMC is a wholly owned GoP company located 40 km south east of Karachi at Bin
Qasim. PSMC commenced commercial operations in various phases from 1981
through 1985. The company has a total workforce of approximately 13200 with a
production capacity of 1.1 million tones of steel per annum. With a vast
total area of 18,600 acres, there is considerable room for expansion. In the
concluding financial year 2004-05 PMSC has created new records of
productivity, sales and profit. With average capacity utilization of 89 %,
PSMC attained aggregated sales of Rs.32.11 billion against a budgeted target
of Rs.26.79 billion and net after tax profit of Rs 6 billion. PSMC also
deposited Rs. 8.9 billion as sales and income taxes in the financial year and
wiped out losses of over Rs 9 billion accumulated in the last 25 years.