The government on Thursday constituted a transaction committee for floating 2.5 per cent shares of Pakistan Petroleum Limited in the stock market, a move that is expected to raise $70 million.
The shares will be offloaded through a secondary public offering, meaning public sale of stocks of a company which is already registered in the equity market. PPL is among top 25 companies being traded at the Karachi Stock Exchange.
The government is the majority shareholder and owns 69 per cent shares in the company which is involved in oil and gas exploration and production. Private investors hold a 21 per cent stake while 10 per cent shares are with PPL Employees Empowerment Trust.
Usually, these kinds of public offerings are made by companies intending to refinance or raise capital for growth. The purpose of the PPL transaction is not yet clear whether the company wants to retire debt or expand operations.
The decision on constituting the transaction committee was taken in a meeting of the board of Privatisation Commission (PC), chaired by Federal Minister for Privatisation Ghous Bux Mahar.
The six-member committee will be headed by a senior board member Iftikharul Haq and members will include Mahmood Nawaz Shah, Farid Malik, PC board members, federal secretaries for petroleum and natural resources, privatisation, finance, SECP chairman and PPL managing director.
The board was informed that expressions of interest (EoIs) from three consortiums for appointment as lead manager and book runners for the secondary public offering had been received. The consortiums included 1 – NIB Bank, Global Securities Pakistan, United Bank Limited and BMA Capital Management, 2 – Allied Bank Limited, KASB Bank, KASB Securities and AKD Securities and 3 – National Bank of Pakistan, Habib Bank Limited, Arif Habib and Foundation Securities.
An evaluation committee will assess the proposals submitted by the interested parties and submit its report on technical pre-qualification to the PC board.
Heavy Electrical Complex transaction structure revised
The board also approved recommendations of the financial adviser for transaction structure of National Power Construction Corporation (NPCC). It permitted the start of proceedings with a strategic sale of 88 per cent government shares of NPCC after approval of the Cabinet Committee on Privatisation (CCOP).
It also endorsed a proposal to allocate the remaining 12 per cent shares to the employees for distribution of unit certificates under the Benazir Employees Stock Option Scheme. KASB Bank is providing financial advisory services for the transaction.
The board also revised the transaction structure of Heavy Electrical Complex. It agreed with the recommendations of the transaction committee for revising the transaction structure as “divestment of equity stake at minimum 96 per cent of the issued, subscribed and paid-up share capital in HEC together with management control.” Earlier it had approved sale of 88 per cent shares of the company.
PC has so far received three EOIs for HEC from Niagra Mills, Pakistan, Areva T and D Pakistan (Private) Limited, France and Alstom Grid Pakistan (Private) Limited, France. A PC spokesman said Areva and Alstom were two different companies and their merger did not take place.
Published in The Express Tribune, July 22nd, 2011.
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D Pakistan is owned by Dawood Ibrahim. its a shame that these mafia dons are able to get into buying companies. Just goes to show one of the world's most wanted is on the loose.