PC says time favourable for OGDC bonds

KARACHI: The Privatisation Commission has said the time is quite favourable for floating an equity-linked instrument because of an attractive low interest rate environment, global economic rebound, stabilised credit spreads and investor focus on emerging markets.

A spokesman for the commission said on Wednesday the Privatisation Commission has not so far appointed financial adviser for sale of convertible and exchangeable bonds of the Oil and Gas Development Company Limited (OGDCL).

In a press statement, he said the equity-linked instrument (exchangeable/convertible bonds) is a hybrid structure and the issuance of an instrument of this nature would require concurrence of the Ministry of Finance and the PC.

The hiring of a global financial adviser for this purpose would be done as per rules and the process included inviting Expressions of Interest (EOI) and Request for Proposals (RFP) packages from advisers and then assessing them on technical and financial basis, he added.

He said the PC has received informal feedback from international markets regarding the proposal of monetising Government of Pakistan’s equity holding in OGDCL to the extent of about 5-7 per cent via an equity-linked instrument.

The feedback came in presentations to the PC Board in its meeting on March 18, he added.

The spokesman said the PC has been making concerted efforts for the last one year to expedite privatisation programme by interacting with market players to get their views on an innovative privatisation structure.

Privatisation process slowed down during the past two to three years due to global economic recession as well as economic meltdown in Pakistan, he said.

Published in The Express Tribune, July 22^nd, 2010.