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The Cabinet Committee on Privatisation (CCOP) in its meeting held here
today approved the slightly amended transaction structure for privatisation of
Pakistan Telecommunication Company Limited (PTCL). The landmark and yet a
complex transaction could not be consummated within the time frame stipulated
in the Share Purchase Agreement. The CCOP chaired by the Prime Minister agreed
to allow Etisalat to make upfront payment of US $ 1.4 billion minus US $ 260
million earlier paid by Etisalat at the time of transfer of management control
to them. It may be recalled that the second highest bidder, namely, China
Mobile has offered US $ 1.4 billion for PTCL. Etisalat would make the balance
payment of US $ 1.19 billion in nine equal six monthly installments. The
installment structure would be fully backed by corporate guarantees to be
furnished by Etisalat.
The CCOP also approved the proposal of the Privatisation Commission to offload
upto 25 % of class A shares in several tranches through competitive bidding
over the next five years. Etisalat would be offered to acquire those shares
through a right to match the highest bid. The minimum price of GoP shares is
always decided by the CCOP. The government would decide about the timing and
size of tranche of class A shares to be offloaded in the light of
the market conditions.
The CCOP also approved listing of State Life Insurance Company (SLIC) on Stock
Exchange. As a first step a certain number of shares would be offered to the
general public as a part of "Privatisation for the People". This would not
only improve the governance within SLIC through better reporting but would
also broaden the shareholding base.
The CCOP, in addition to the above, approved placing through Global Depository
Receipts (GDR) of Oil & Gas Development Company (OGDC). This would not only
attract international fund managers and other equity participants in
Pakistan's market. Pakistan is already well known in the international debt
market through Eurobond and Sukkuk Bond. Such a move would also help in
benchmarking the real value of OGDC. The GDR will be issued in consultation
with the Ministry of Finance and both Ministries will be involved in
structuring, packing and sale of the shares.