#Home Privatisation of strategic assets to begin in mid-2015: ISLAMABAD: With the government completing the third capital market transaction by disposing of its remaining 131 million shares — 11.5 per cent of the total paid-up share capital of the Allied Bank Ltd — at a price of Rs110 per share, Minister of State for Privatisation and Chairman of Privatisation Commission Mohammad Zubair announced on Friday that sale of strategic assets would commence in mid-2015. “The process is absolutely on and financial advisers are performing their job, whether it is the Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), National Power Construction Company (NPCC) or power distribution companies like Iesco and Fesco,” Mr Zubair told a news conference here. He said the appointment of financial advisers for privatisation of Lesco had almost been finalised. Recognising the positive response from investors, the Privatisation Commission had decided to extend by two weeks the deadline for submitting requests for proposals for the appointment of advisers for the privatisation of PSM, Mr Zubair said. The government, he said, intended to carry out divestment of the Heavy Electric Complex, NPCC, Fesco, Iesco and Lesco with management control, while in the case of PIA it wanted to go for restructuring followed by divestment of 26 per cent government equity stakes to strategic partner with management control. --- Zubair says process is on for the sale of PIA, PSM, NPCC, power distribution companies --- Answering a question, Mr Zubair said the capital transaction of Habib Bank Ltd would be completed by March next year, for which the consortium of Credit Suisse and Deutsche Bank had been appointed as financial advisers. Explaining the process for sale of strategic assets, Mr Zubair said the government had to ensure transparency in fulfilling regulatory requirements which took at least six months, while the prospective buyers needed two to three months to complete “due diligence”. “The entire process is continuing speedily and implementation will start in the middle of next year,” he said. About the divestment of residual government shares in ABL, Mr Zubair said the capital market transaction was completed in the shortest possible period. The process was completed in only 19 working days, he said. With the completion of the ABL transaction, the government would have no shares in ABL and UBL, while in the case of PPL the government had divested five per cent shareholding but retained the management. The chairman of the Privatisation Commission said a total of 131 million shares were offered for divestment in the stock market. However, orders for 185 million shares were placed, reflecting overwhelming interest of investors. Against the ‘strike price’ of Rs110 per share, the orders placed are worth Rs14.4 billion. At the close of business on Thursday, price of the share rose to Rs112.76. However, a discount of Rs2.76 has been offered. This is one of the lowest discounts offered for similar transactions anywhere in Asia over the last several years. The Philippines offered 12 per cent while Malaysia offered 3 per cent discount on such transactions based on the average discount on the basis of six months. Answering a question about the allocation of ABL shares, Mr Zubair said 40 per cent of the shares were for ‘high net worth individuals’, 47 per cent for local institutions and 13 per cent for foreign investors. The minimum bid amount had been restricted to Rs500,000 in order to allow the public to actively participate in the bidding process. Earlier in the day, the Cabinet Committee on Privatisation headed by Finance Minister Ishaq Dar unanimously approved the strike price for divestment of residual government shares in ABL, and allocation of shares to successful bidders. Published in Dawn December 13th , 2014
Posted on: Sat, 13 Dec 2014 03:42:20 +0000
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