PC EXTENDS EOI & SOQ DATE FOR HEAVY ELECTRICAL COMPLEX (HEC)

Islamabad, November 21, 2006

Due to the increasing interest of parties to participate for the privatisation of Heavy Electrical Complex (HEC) the Privatisation Commission has extended the date for filing the Expressions of Interest (EoI) for HEC to November 30, 2006. Earlier, it was advertised on October 20, 2006 in the leading national dailies and was re-advertised on October 27, 2006 with November 22, 2006 as last date for receiving EOIs.

EOIs should be submitted (in duplicate) together with a non-refundable processing fee of US$ 5,000/- or PKR 300,000/- to reach the PC at the given addresses by November 30, 2006.

All the parties, which shall submit EoI, would be sent Request of Statement of Qualification (RSOQ) for response, which shall form the basis of pre-qualification. The last date to submit the Statement of Qualification (SOQ) shall now be December 15, 2006 accordingly.

Heavy Electrical Complex (HEC) is one of the industrial units of State Engineering Corporation (SEC) engaged in the manufacturing of power transformers of different types (total annual capacity 3000 MVA) with primary voltage rating of 66 and 132 KV. In addition, the HEC undertakes repair and refurbishment of old and damaged power transformers upto 500 KV. HEC was incorporated as a private limited company in 1991 and commenced full-scale commercial operation in 1997.

HEC is located in Hattar Industrial Estate about 65 Km from country’s capital Islamabad. HEC is spread over an area of 81.379 acres. A total of 63 acres of land is included in the transaction out of which 20 acres is non-core land for expansion. Major clients of HEC products include WAPDA, its corporatized entities and KESC.

HEC has six main manufacturing shops namely Machine shop, Winding shop, Insulation shop, Core shop, Fabrication shop and Assembly shop. In addition HEC has an oil purification shop, high voltage test laboratory equipped with 250 tonne overhead traveling crane. HEC can diversify its manufacturing range by including other products such as instrument transformers, high voltage circuit breakers and other grid stations equipped for meeting demand of the products in domestic and foreign markets.

The Privatization Commission has invited Expression of Interest (EOI) from prospective investors (Mechanical Engineering, Electrical Engineering and or Industrial Companies and groups, consortium of investors with demonstratable ability to own, efficiently manage and operate the Company) for the acquisition of minimum 90% shares of Heavy Electrical Complex (‘HEC’) together with management control on an `as is, where is’ basis.

The Purchaser shall continue to operate company’s manufacturing facility and shall not in any way abandon, cease to operate or otherwise shutdown the existing Company manufacturing facility. The Purchaser will not in any form or manner dispose off, alienate transfer any or all land in the name of the Company without the prior consent of PC.The cost of Golden Hand Shake Scheme (GHS) for permanent workers and Voluntary Separation Scheme (VSS) for the executives will be shared equally between the new buyer and the Privatisation Commission. The bidder shall bid on the basis of audited accounts of June 2006 and may also factor the latest un-audited accounts available prior to the bidding. The loan from Government of Pakistan amounting to Rs. 1,002 million will be written back in the books of HEC and tax impact after adjustment brought forward losses of Rs. 376.708 million shall be borne by the Privatisation Commission. All terms and conditions relating to privatisation of HEC shall be communicated to all bidders from time to time prior to the bid date.

Information Memorandum, Bid Documents and Time Frame for the Pre-Bid conference and bidding date will be provided to Pre-qualified parties only. The Government of Pakistan, Privatisation Commission reserves the right not to respond to any request for preliminary or other information. Documentation accompanying and comprising an Expression of Interest as provided by any investor or consortium shall not be reclaimable or returned. This offer is not intended to be, and should not be construed as: (a) an offer or invitation to acquire any securities or assets of HEC; and (b) any representation or warranty, express or implied, with respect to any statement made herein.