PRIVATISATION THROUGH PUBLIC PRIVATE PARTNERSHIP UNDER CONSIDERATION-Syed Naveed Qamar addresses handing over of HPFL ceremony  

Islamabad, November 28, 2008

The government is considering the privatisation of public sector entities through Public Private Partnership instead of the out right sale of State Owned Entities (SOE). Syed Naveed Qamar Federal Minister for Privatisation stated while addressing the signing of Share Purchase Agreement (SPA) and handing over ceremony of Hazara Phosphate & Fertilizers (Pvt) Limited (HPFL) here today.

He said that there was no haste in the privatisation of public sector entities and all stakeholders would be taken on board prior to taking the transactions to the market. The privatisation process would be taken ahead while keeping in view the market conditions, he added.

Referring to the privatisation of HPFL Syed Naveed Qamar hoped that the transparent and open process of HPFL privatisation would further restore the investors confidence and the new management of HPFL would bring in fresh investment to expand the operation and to increase the production of fertilizers, which would help in saving the Foreign Exchange reserves being spent for import of UREA/ DAP to meet the demand.

The Minister further stated that standard SPA was being followed by the Privatisation Commission since 1991 and the employees were free to voluntarily exercise the GHS/VSS offer as being practiced earlier. Golden Handshake Scheme (GHS) and Voluntary Separation Scheme (VSS) have been offered to the permanent workers and executives of HPFL.

Mr. Ahmed Shaikh CEO AZGARD-9, on behalf of Pak American Fertilizers Limited, lauded the privatisation process and said that the Privatisation Commission conducted the transaction in a highly professional manner. There was a vast scope to chalk out plan for further expansion in its operation and to increase the production. We would retain the workforce on merit, he added.

Earlier, Mr. Ahmed Jawad Secretary Privatisation Commission, Mr. Muhammad Khalid Malik Chairman National Fertilizers Commission (NFC) and Mr. Ahmed Shaikh of PAFL signed the Share Purchase Agreement (SPA) on behalf of their respective organizations after receiving the final payment of remaining 75 % Rs. 965. 018 million of bid price and 50 % share of GHS/VSS of Rs.45.040/- million and the formal handing over of HPFL took place in the presence of the Minister and the media representatives.

The Privatisation Commission had already received 25 % sale price (i.e. Rs. 335.006 million) for the sale of Hazara Phosphate & Fertilizers Limited (HPFL) within the stipulated time from the successful bidder Pak American Fertilizers Limited (PAFL) as per terms of the Letter Of Acceptance (LoA).

Consequent to the approval by the Cabinet Committee on Privatisation (CCOP) on September 29, 2008 of the highest bid of Rs.70/= per share (Total: Rs.1,340,024,490/= for 100 % shares) and declaration of Pak American Fertilizers Limited (PAFL) as the successful bidder, Letter of Acceptance (LoA) was issued on September 30, 2008.

The Privatisation Commission received the highest offer of Rs.1. 34 billion (Rs.1, 340,024,490/-) from Pak American Fertilizers Limited at the rate of Rs.70 per share for 100 % shares during an open bidding held on September 25, 2008 for the sale of minimum of 90% shares of Hazara Phosphate Fertilizers (Private) Limited (HPFL) together with management control on ʽas is where isʼ basis through an open bidding process among the pre-qualified parties.