Change of hands: First privatisation deal in three years expected by Sept

Three parties express interest in acquiring Heavy Electrical Complex.

ISLAMABAD:

Three private sector parties, including a franchise of a foreign company, have shown interest in purchase of majority shares of Heavy Electrical Complex (HEC), raising hopes for the first privatisation transaction in almost three years.

According to an official handout issued on Thursday, the Privatisation Commission has received Expressions of Interest (EOIs) for purchase of 88 per cent shares of HEC from three parties. The parties are Niagara Mills (Private) Limited, Faisalabad, Areva T&D Pakistan (Private) Limited, Karachi and Alstom Grid Pakistan (Private) Limited, France.

“The successful bidder will continue to operate the company’s manufacturing facility as a going concern,” said the Privatisation Commission.

The remaining 12 per cent shares have been allocated for employees of HEC through the Benazir Employees Stock Option Scheme (BESOS).

Since 1991, the government has privatised 167 enterprises and earned Rs476.4 billion. The last transaction was completed in November 2008 when the government sold Hazara Phosphate Fertilisers to Pak-American Fertiliser at Rs1.3 billion. After 2008, privatisation plans could not take off due to economic meltdown coupled with deteriorating law and order situation.

The Privatisation Commission said the Request for Statement of Qualification (RSOQ) had been dispatched to those parties that submitted the EOIs to form the basis for pre-qualification. The parties have been given the deadline of July 2 to submit required documents. After that, due diligence will be conducted and bidding is expected to take place by September.

The Commission said information memorandum, bid documents and timeframe for the pre-bid conference and bidding date would be provided to pre-qualified parties only.

HEC is one of the industrial units of State Engineering Corporation engaged in manufacturing of power transformers of different types with total annual capacity of 3,000 MVA and primary voltage of 66 and 132 kilovolts (KV). In addition, HEC also undertakes repairs and refurbishment of old and damaged power transformers of up to 500KV.

It was incorporated as a private limited company in 1991 and commenced commercial operations in 1997. The complex is located in Hattar Industrial Estate about 65 km from the capital Islamabad.

HEC has an oil purification shop and a high-voltage test laboratory equipped with overhead travelling cranes. HEC can diversify its manufacturing range by including products like instrument transformers, high-voltage circuit breakers and other grid station equipment for meeting demand of the products in domestic and foreign markets.

Published in The Express Tribune, June 17^th, 2011.