NO FINANCIAL ADVISOR APPOINTED FOR SALE OF CONVERTIBLE/ EXCHANGEABLE BONDS OF OGDCL-PC Spokesman
 

Islamabad, July 21, 2010

Referring to a news report appeared in daily Business Recorder on July 18, 2010 titled, “Sale of Convertible Bonds of OGDCL-Finance concerned at appointment of advisor”; a spokesman of the Privatisation Commission (PC) has termed the report as completely misleading and contrary to the facts and has categorically denied appointment of any Financial Advisor in this regard.

The spokesman said that the equity linked instrument (exchangeable/ convertible bonds) were hybrid instruments and issuance of an instrument of this nature would require concurrence of Ministry of Finance and the Privatisation Commission. The hiring of a global Financial Advisor for this purpose would be done as per rules in practice for hiring of Financial Advisors and the process included inviting of Expression of Interest (EOI) and Request for Proposals (RFP) packages from advisors and then subsequently assessing them on Technical and Financial basis, which was a completely transparent process, he added.

He further commented that the privatisation process slowed down during the past 2 to 3 years due to global economic recession as well as economic melt down in Pakistan, however, PC has been making concerted efforts for the last one year to expedite the Privatisation Program by interacting with the market players to get their views on innovative privatisation structure.

He added that as a result of these efforts the PC received informal feedback from international markets regarding proposal of monetizing GoP’s equity holding in Oil & Gas Development Company Limited (OGDCL) to the extent of approximately 5-7 % via an equity linked instrument. The feedback came during presentations to PC Board in its meeting held on March 18, 2010.

PC has received indicative proposals from JP Morgan, Barclays Capital, RBS, Citi Bank, Nomura Bank, Credit Suisse, Deutsche Bank, Standard Chartered, HSBC, KASB and Bank of America/ Merrill Lynch.

The spokesman observed that in view of attractive low interest rate environment, global economic rebound, stabilized credit spreads and investor focus on emerging markets, it is a favorable time to do an issuance for an equity linked instrument by the Government of Pakistan.