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Dr. Abdul Hafeez Shaikh Federal Minister for Privatisation and Investment
directed the Inter-Ministerial Committee to ensure the early resolution of all
the issues before the holding of pre-bid conference for the privatisation of
Pakistan Steel Mills Corporation (PSMC), scheduled on January 16, 2006. He
issued these instructions while reviewing the progress
of privatisation process of PSMC here today.
The Minister said that all concerned should perform in a proactive manner for
timely completion of the transaction. The privatisation of PSMC was essential
for the expansion and enhanced capacity, which required fresh investment of US
$ 1.2 billion for the expansion of the unit to achieve minimum 3 million tones
capacity production while another investment of around Rs. 12 billion was
required for renovation of Coke Oven Batteries (COB) and other areas, he
stated.
Dr. Hafeez Shaikh further stated that the privatisation of PSMC would be
beneficial for both the employees and the company and that the efforts were
being made to safeguard the employees' rights and interests.
Gen (RETD) Abdul Qayyum Chairman PSMC assured full support to all the
stakeholders to take the transaction forward by extending maximum cooperation
for its completion.
The Committee was informed that the pre-qualified parties were currently
completing the due diligence of the transaction in the data room and they have
also conveyed their first round of comments on bidding documents.
The pre-qualified nine parties include 1.Aljomaih Holding Company (Saudi
Arabia), 2. Al-Tuwairqi Group Of Companies, Kingdom of Saudi Arabia with Arif
Habib Group of Companies, Pakistan, 3. Azovstal Steel/ System Capital
Management (Ukrine), 4. Government of Ras Al Khaimah (UAE), 5. International
Industries Ltd (Pakistan) and Industrial Union of Donbass (Ukrine), 6.
Magnitogorsk Iron & Steel Works Open JSC, Russia, 7.Nishat Mills Limited and D
G Khan Cement Company Ltd (Pakistan), 8.Noor Financial Investment Company,
Kuwait and 9.Shanghai BaoSteel Group Corporation, China.
The Privatisation Commission has offered to qualified strategic Investors
interested for acquiring 51-75% equity stake in Pakistan Steel Mills
Corporation (Pvt.) Ltd. ("PSMC" or the "Company"), together with management
control, on an 'as is, where is' basis. A consortium led by Citigroup Global
Markets Limited is advising the PC on the sale.
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 165MW of own
power generation units, supported by various other ancillary units. It is
located 30km 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.
The Mr. M. Tahsin Khan Iqbal Secretary PC senior officials of Ministry of
Industries, Production & Special Initiatives, the representatives of Pakistan
Steel Mills Corporation (PSMC), Ministries of Law, Finance, CBR, PC, Financial
Advisor and other respective departments were present during the meeting.