PC board approves steel mill restructuring

Process includes 30-year revenue-sharing agreement with potential investor

ISLAMABAD: The Privatisation Commission (PC) board has approved the restructuring of Pakistan Steel Mills (PSM) as well as a tripartite concession agreement between the government, the mill and the potential investor for a period of 30 years on the basis of revenue-sharing.

In a meeting held at the PC on Tuesday, the board gave the go-ahead to the transaction structure proposed by the financial advisers for the restructuring of the steel mill.

The transaction structure, which will be presented to the Cabinet Committee on Privatisation (CCoP) in coming days, includes a tripartite concession agreement between the government, PSM and the investor for 30 years based on revenue-sharing.



Under the plan, PSM land will remain with the government while its plants and machinery will be handed over to the buyer for a maximum of 30 years. No asset of the mill will be sold.

The PC board also approved the transaction structure of SME Bank including the sale of 93.88% government shareholding.

In line with the proposed structure, the State Bank of Pakistan will allow a reduced minimum capital requirement (MCR) of Rs6 billion over a period of five years, with Rs2 billion upfront and Rs1 billion each for the next four years.

The central bank will issue a new specialised banking licence to the potential investor with at least 60% advances for the small and medium enterprise (SME) sector and also allow 10% Capital Adequacy Ratio (CAR) for five years after privatisation.



Responding to a request from the Ministry of Information, the PC board agreed to remove Shalimar Recording and Broadcasting Company from the privatisation programme.

It also agreed to constitute a committee for evaluating the viability of delisting Sindh Engineering Limited from the privatisation list, which had been requested by the Ministry of Industries and Production.

The committee will assess the legal status of Sindh Engineering Limited’s assets and come up with a comparative analysis in case of privatisation, restructuring or delisting of the enterprise.



The PC board gave the green light to the initiation of the process of hiring financial advisers for Pakistan Reinsurance Company Limited, National Insurance Company and Heavy Electrical Complex.

It also approved the beginning of capital market transaction of Oil and Gas Development Company shares up to a maximum of 5%. This will be a domestic offering.