ISLAMABAD: The government has sought expressions of interest from commercial and investment banks to manage the offloading of 2.5 per cent shares of Pakistan Petroleum Limited (PPL) in the domestic stock market to raise around $70 million for refinancing and expansion of the company’s operations.
According to an official handout, interested lead managers – commercial and investment banks – are required to submit documents by July 20 to manage PPL’s secondary public offering. The government holds 70.6 per cent shares in PPL and wants to offload 2.5 per cent (21.1 million) shares.
In July 2004, the government for the first time floated 15 per cent shares of PPL in the domestic market and earned Rs5.6 billion. In the secondary offering, existing shareholders have the first right of buying.
The lead manager will have the primary responsibility to organise the stock issue. The selected bank will find other lending organisations or underwriters to create a syndicate, negotiate terms with the issuer and assess market conditions.
PPL is a frontline supplier of energy, contributing almost a quarter of the country’s natural gas supplies besides producing crude oil, natural gas liquid and liquefied petroleum gas (LPG), said the Privatisation Commission.
It said proven recoverable reserves of PPL were 2.87 trillion cubic feet of natural gas, 14.8 million barrels of oil and natural gas liquid and 316,000 tons of LPG. PPL is listed on all three stock exchanges of the country.
The Commission said the lead manager and book runner, who has recognised equity sales and distribution capabilities and track record of successfully managing and executing similar transactions, will manage the transaction. In addition to the public offer for sale, the lead manager may recommend other suitable capital market structural alternatives under the prevailing market conditions in order to maximise value extraction for the government and bring long-term benefits to PPL, it added.
The interested parties have been asked to submit EOIs along with non-refundable processing fee of $2,500 or equivalent in local currency.
Published in The Express Tribune, June 19th, 2011.
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