PROPOSALS FOR ISSUANCE OF OGDCL BONDS TO BE TABLED BEFORE CCOP IN THE FOLLOWING WEEK

Islamabad, March 27, 2010

 
World’s top 10 investment groups have been asked to submit proposals along with market assessment for issuance of Oil & Gas Development Company Limited (OGDCL)’s Bonds, to be tabled before Cabinet Committee on Privatisation (CCOP) in the upcoming meeting being scheduled in the following week, in accordance with Privatisation Commission (PC) Ordinance 2000 under section 25: “Modes of Privatisation”, which authorizes the PC to carry out privatisation in accordance with the prescribed procedure, through any of the modes including sale of assets and business, sale of shares through public auction or tender, public offering of shares through a stock exchange, management or employee buyouts by management or employees of a state owned enterprise, lease, management or concession contract or any other method as may be prescribed.

The PC Board in its meeting on March 18, 2010 attended by the representatives of Ministries of Finance and Petroleum & Natural Resources approved to obtain proposals and detailed market assessment for submission to Cabinet Committee on Privatisation (CCOP) to proceed further. Citibank, J P Morgan, Nomura Investment Inc; UK, Barclays Bank, Morgan Stanley, Goldman Sachs, Credit Suisse, Merrill lynch and others had also made presentations before the PC Board including their top management through electronic mode. All these financial institutions have been asked for respective proposals and reports. A summary in this regard has been sent to the Prime Minister.

The PC intends to appoint a Bookrunning Consortium for divestment of equity of OGDCL via a US $ 500 million exchangeable bond with an upside option of US $ 100 million with no sovereign resource. The groups have been asked to submit their separate sealed Technical and Financial proposals free of cost, indicating their relevant experience, competence of team, work plan, methodology and presentations with hard underwriting and coupon services.

The OGDCL Bonds activity will build a diversified and high quality international investor base and would also improve standing of domestic capital markets through increased foreign institutional investors and foreign direct investment flows.

On March 25, 2010, the top management of OGDCL held a meeting with the Minister for Privatisation and expressed their full support for the completion of the transaction, which would help OGDCL to speed up their exploration activity. The Minister assured the management to take forward the transaction on fast track basis keeping in view the keen interest being shown by the market players.