PC INVITES EOI FOR SALE OF MINIMUM 90% SHARES OF PAKISTAN MACHINE TOOL FACTORY (PRIVATE) LIMITED

Islamabad, November 10, 2007

The Privatisation Commission (‘PC’) has invited Expression of Interest (EOI) from prospective investors i.e. companies or consortia engaged in manufacturing or engineering business who can demonstrate the ability to own and efficiently manage and operate the Company for the acquisition of minimum of 90% shares of Pakistan Machine Tool Factory (Pvt.) Ltd. (PMTF) together with management control on ‘as is, where is’ basis.

Prospective investors interested in joining the process have been to submit an Expression of Interest (‘EOI’) by December 10, 2007 in duplicate together with a non-refundable processing fee of US$ 5,000 or PKR 300,000/=. All the parties, which shall submit EoI would be sent Request for Statement of Qualification (RSOQ) inviting Statement of Qualification (SOQ) which shall form the basis of pre-qualification. Closing date for submission of Statement of Qualification (SOQ) is December 26, 2007.

Pakistan Machine Tool Factory (Private) Limited (PMTF) is a unit of State Engineering Corporation (Private) Limited (SEC) under the administrative control of Ministry of Industries, Production & Special Initiatives. PMTF is a private limited company with 100% shares owned by the Government of Pakistan (GOP). The factory was established in 1968 under the technical collaboration with Oerlikon Buhrle of Switzerland with paid-up capital of Rs.291.696 million. It commenced commercial production in 1970 and obtained ISO 9001:2000 certification in 1997/2000.

The Company’s machinery and ancillary facilities to support manufacturing activities include a variety of conventional and CNC facilities within its premises, as Forging, Machining (Turning, Milling, Gear Cutting, Gear Grinding, Broaching, Spline Rolling, Boring, etc), Pressure Die Casting, Heat Treatment, Surface Treatment, Material Testing, Product Designing, Tool Designing, Tool Room Shop, Sheet Metal & Welding Shop, CNC Shop, Electronic Lab., Machine Rebuild Shop & Power Station. PMTF expanded and modernized its production facilities in 1986 and 2005 to meet the requirements of enhancing the product-mix in accordance with market demand.

The company is presently engaged in the production of gear transmissions for tractors and other vehicles, traction gears for locomotives, pressure die cast components for motorcycles and gas meters, defence products and machine tools. The existing facilities can be geared to manufacture and assemble motor vehicles, tractors, motorcycles etc. Alternatively, existing facilities with suitable adjustments can also be used for manufacturing textile spinning frames, looms, etc. Its customers include the assemblers of tractors, motorcycles, cars, trucks, gas meters, government / multinational organizations, vocational training centers, engineering units and defence agencies.

The interested parties have been asked to clearly provide the information with EOI including Name of company, nature of business and other background information alongwith copies of constitutive documents, Proof of net worth of Rs.1 billion as per audited financial statements, duly certified by a firm of Chartered Accountants, for the latest year but not earlier than December 2006, List of director(s) along with copies of Computerized National Identity Card (CNIC) and National Tax Number (NTN), Name, Address, Telephone, Mobile, Fax, Email of the Focal Person to be contacted, Pending, threatened litigation(s) against the company and the director(s) and in the event of a consortium, the consortium will be required to provide a consortium agreement identifying the lead bidder (a company) and setting forth obligation inter-se of consortium members.

The other conditions interalia include the Purchaser shall provide an undertaking to continue to operate Company’s manufacturing facility and shall not in any way abandon, cease to operate or otherwise shutdown the Company’s existing manufacturing facility / processes, Ten (10) % shares would be offered to those regular employees of PMTF who do not opt for GHS/VSS at 10% discount to the bid of the successful bidder’s per share value. Remaining Shares not purchased by the regular employees shall be purchased by the Successful Bidder on its bid price, The cost of Golden Hand Shake Scheme (GHS) for permanent workers based on All Pakistan State Enterprises Workers Action Committee (APSEWAC) agreement and Voluntary Separation Scheme (VSS) for the permanent 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 2007 and may also factor in the latest un-audited accounts available prior to the bidding. All matters including terms and conditions relating to privatisation of PMTF shall be communicated to all qualified bidders from time to time prior to the bid date which shall form the basis for the bid. Privatisation Commission reserves the right to accept any bid or reject all or any of the bids at any stage without assigning any reason therefor. Preliminary information regarding PMTF is available on the website: www.privatisation.gov.pk. 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, Privatization 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 PMTF; and (b) any representation or warranty, express or implied, with respect to any statement made herein.