PC Board meeting: Govt appoints financial advisers for selling stake in State Life
Will sell up to 15% stake in insurance corporation, decision on FASA deferred
The petroleum ministry has recommended Pakistan to continue maintaining its existing 60% shareholding in PARCO. PHOTO: FILE
ISLAMABAD:
The Privatisation Commission Board on Tuesday appointed lead managers and financial advisers for selling up to 15% government stake in State Life Insurance Corporation (SLIC) and privatising the Small and Medium Enterprises Bank Limited.
Headed by Privatisation Commission Chairman Mohammad Zubair, the board deferred the decision on suspending Financial Advisory Services (FASA) contract with a consortium hired for the privatisation of Peshawar and Multan power distribution companies. It also did not take a decision on de-listing Pak Arab Refinery Company (PARCO), and referred the matter to the Cabinet Committee on Privatisation (CCoP).
The board meeting has taken place at a time when serious questions have been raised over government’s intentions to privatise loss-making enterprises.
SLIC
The board approved appointing a consortium of Habib Bank Limited (HBL), Bank Alfalah Limited (BAFL), Arif Habib Limted (AHL) and Elixir Securities Pakistan Private Limited as lead manager and book runner for divestment of up to 15% stakes in the SLIC - the insurance giant. The consortium placed the lowest bid of Rs20 million as financial advisory services cost.
In July 2014, the PC board approved the initiation of appointing the lead manager and book runner for the transaction. Besides Arif Habib, two other consortia of MCB Bank Limited (MCB), Allied Bank Limited (ABL), AKD Securities Limited (AKD) and JS Global Capital Limited, Topline Securities Private Limited, Next Capital Limited And United Bank Limited had pre-qualified for the bidding.
The MCB quoted Rs21.2 million bid price, becoming the second lowest. However, the PC did not open the financial bid of JS Global Capital Limited after the Securities and Exchange Commission of Pakistan (SECP) highlighted that the consortium of JS Global Capital Limited did not comprise of a registered book runner
The consortium did not disclose this in their technical proposal at the time of submission. This was tantamount to concealing facts and providing PC with materially incomplete information. The Board disqualified the JS Global Capital Limited consortium.
The government wants to sell at least 10% to 15% stakes in SLIC by June this year, according to information provided to the International Monetary Fund (IMF). The insurance giant had Rs496.7 billion in assets as of 2014. Its income from investment and premium stood at Rs57.5 billion in that year.
SME Bank
The Board also approved to appoint a consortium of Elixir Securities and Bridgefactor as financial adviser for the privatisation of SME Bank, subject to successful contract negotiations.
FASA
The Board deferred the decision on whether to terminate or continue the agreement with a consortium that had been hired for the privatisation of Multan Electricity Supply Company (Mepco) and Peshawar Electricity Supply Company (Pepco).
PARCO
The Board did not take a decision on the summary moved by the Ministry of Petroleum to remove PARCO from the privatisation list.
Published in The Express Tribune, January 20th, 2016.
The Privatisation Commission Board on Tuesday appointed lead managers and financial advisers for selling up to 15% government stake in State Life Insurance Corporation (SLIC) and privatising the Small and Medium Enterprises Bank Limited.
Headed by Privatisation Commission Chairman Mohammad Zubair, the board deferred the decision on suspending Financial Advisory Services (FASA) contract with a consortium hired for the privatisation of Peshawar and Multan power distribution companies. It also did not take a decision on de-listing Pak Arab Refinery Company (PARCO), and referred the matter to the Cabinet Committee on Privatisation (CCoP).
The board meeting has taken place at a time when serious questions have been raised over government’s intentions to privatise loss-making enterprises.
SLIC
The board approved appointing a consortium of Habib Bank Limited (HBL), Bank Alfalah Limited (BAFL), Arif Habib Limted (AHL) and Elixir Securities Pakistan Private Limited as lead manager and book runner for divestment of up to 15% stakes in the SLIC - the insurance giant. The consortium placed the lowest bid of Rs20 million as financial advisory services cost.
In July 2014, the PC board approved the initiation of appointing the lead manager and book runner for the transaction. Besides Arif Habib, two other consortia of MCB Bank Limited (MCB), Allied Bank Limited (ABL), AKD Securities Limited (AKD) and JS Global Capital Limited, Topline Securities Private Limited, Next Capital Limited And United Bank Limited had pre-qualified for the bidding.
The MCB quoted Rs21.2 million bid price, becoming the second lowest. However, the PC did not open the financial bid of JS Global Capital Limited after the Securities and Exchange Commission of Pakistan (SECP) highlighted that the consortium of JS Global Capital Limited did not comprise of a registered book runner
The consortium did not disclose this in their technical proposal at the time of submission. This was tantamount to concealing facts and providing PC with materially incomplete information. The Board disqualified the JS Global Capital Limited consortium.
The government wants to sell at least 10% to 15% stakes in SLIC by June this year, according to information provided to the International Monetary Fund (IMF). The insurance giant had Rs496.7 billion in assets as of 2014. Its income from investment and premium stood at Rs57.5 billion in that year.
SME Bank
The Board also approved to appoint a consortium of Elixir Securities and Bridgefactor as financial adviser for the privatisation of SME Bank, subject to successful contract negotiations.
FASA
The Board deferred the decision on whether to terminate or continue the agreement with a consortium that had been hired for the privatisation of Multan Electricity Supply Company (Mepco) and Peshawar Electricity Supply Company (Pepco).
PARCO
The Board did not take a decision on the summary moved by the Ministry of Petroleum to remove PARCO from the privatisation list.
Published in The Express Tribune, January 20th, 2016.