OGDCL bonds: Body made to bargain with financial advisers

PC seeks reduction in service charges from pre-qualified consortia.


Express May 10, 2011

ISLAMABAD:


The government on Monday constituted a committee for bargaining with banks to lower their service charges for upcoming issuance of exchangeable bonds in the international market in a bid to raise up to $1 billion for budget financing.


The Privatisation Commission (PC) Board, which met under the chairmanship of newly-appointed Privatisation Minister Ghous Bux Khan Mahar, formed the negotiating committee for the appointment of financial advisory consortia. Another committee was also constituted that will work for the appointment of the issuer’s legal counsel for the exchangeable bonds of the Oil and Gas Development Company Limited (OGDCL).

The government wants to sell up to 10 per cent of its shares in OGDCL for raising money to finance the soaring budget deficit. It expects to complete the transaction before June.

A Pre-Qualification Committee (PQC), constituted by the PC Board, has selected two parties - Citibank, JP Morgan, Credit Suisse and BMA consortium and Barclays Bank, Standard Chartered, Merrill Lynch/Bank of America and KASB consortium. The committee has put the consortium of Citibank, JP Morgan, Credit Suisse and BMA on top.

The PC board authorised the six-member committee to negotiate with the top-ranking consortia and inform the board about the outcome for proceeding further with the hiring process.

The PC Board also constituted another committee with the task to negotiate with Bhandari Naqvi & Riaz and Freshfields Bruckhaus Deringer LLP for appointment of the issuer’s legal counsel for OGDCL bonds.

While reviewing implementation of decisions taken in the previous board meeting, the PC board was informed that Expressions of Interest (EOI) had been invited from interested parties for sale of 88 per cent government shares in Heavy Electrical Complex (HEC). Furthermore, the board was informed that National Power Construction Company’s (NPCC) transaction was progressing on fast track and would be completed within the given timeframe of four months.

The appointment of a lead manager for divestment of Pakistan Petroleum Limited (PPL) shares through a secondary public offering was also under process by the transaction committee, the board was informed.

Published in The Express Tribune, May 10th, 2011.

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