|
|
|
|
|
The Privatisation Commission has received Rs.5.420 billion i.e. 25 % of the
total bid for the 75% strategic Stake (1,290,487,275 shares) of Pakistan Steel
Mills Corporation (PSMC) from Consortium of Magnitogorsk Iron & Steel Works
(Russia), TuwairqiSteel Mills (Saudi Arabia) and Arif Habib Securities. The
buyer was required to deposit 25 % of the bid with 20 days after the issuance
of Letter of Acceptance (LoA), which was issued after the approval of the
Cabinet Committee on Privatisation (CCOP) on March 31, 2006. The remaining
amount will be deposited within the 60 days after the issuance of LoA.
The highest offer of Rs.16.80 per share making a total of Rs.21.680 billion
i.e equivalent to US $ 362 million was offered by the Consortium of
Magnitogorsk Iron & Steel Works (Russia), TuwairqiSteel Mills (Saudi Arabia)
and Arif Habib Securities during the two rounds of bidding, which was held in
front of the large number of the representatives of print and electronic
media. The bids were opened and read out by two senior journalists during the
first round.
The Cabinet Committee on Privatisation (CCOP) had authorised Privatisation
Commission to issue Letter of Acceptance (LOA) to the successful bidder
Consortium of Magnitogorsk Iron & Steel Works (Russia), TuwairqiSteel Mills
(Saudi Arabia) and Arif Habib Securities whose offer was within the acceptable
range.
The bidding determined the value of Pakistan Steel Mills 100 % assets to US $
482 million. Out of 19000 acres of the land of PSMC around 14500 acres worth
about US $ 800 million has been separated from the transaction, which will be
used by the government for appropriate project.
An agreement has been reached with the employees and they have been offered a
package, which has never been given to the employees of any other entity. Nine
parties had been prequalified out of which 8 conducted active due diligence.
Out of these five parties attended the pre-bid meeting. The pre-qualified
parties completed their due diligence of the transaction
including plant visits and physical / virtual data room. Six pre-qualified
parties joined to form two strong bidding consortiums, which later
participated in the bidding.
PSMC is the country's largest and only integrated steel manufacturing plant,
with an annual designed production capacity of 1.1 million tonnes. It was
incorporated as a private limited company in 1968 and commenced full-scale
commercial operations in 1984. PSMC complex includes coke oven batteries, a
sintering plant, blast furnaces, steel converters, bloom and slab casters,
billet mill, hot and cold rolling mills, galvanizing unit and 165 MW of own
power generation units, supported by various other ancillary units. It is
located 40 km south east of the coastal city of Karachi, in close proximity to
Port Bin Qasim, with access to a dedicated jetty, which facilitates import of
raw materials, PSMC manufactures a wide mix of products, which includes both
flat and long products, PSMC effectively enjoys a captive domestic market due
to the prevalent demand-supply imbalance in the country's steel industry,
where demand has historically exceeded local supply.