Govt seeks lead managers for $70m PPL share offer

Invites interest from banks to float 2.5% shares of Pak Petroleum.

Express June 18, 2011

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.


s qamber ali shah | 10 years ago | Reply It is also worth mentioning at the amount of money ,likely to be spent by way of commmissions etc, when money is in hand. One announcment with price and the foriegn invesors will come in with tons of foriegn money to buy the BLUE CHIP, Besides, A Islamic sukuk bond could be the best, as without Government selling its precious, dividend yielding share, could get shariah based finance at lower rate than the dividend itself, and that too in foriegn currency???
s qamber ali shah | 10 years ago | Reply PPL should not have any issue with the OFFER, even if Direct offer made would result in positive and by the time EOIs would come in. You have the required subscription in your hand. Hats off to the initiator of the process. I am also sure, he/she would be knowing who gets EOI and what next, as usual fashion and the lucratives lying ahead.
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