According to a handout issued by the PC on Friday, this activity can turn around the Rs265 billion loss-making units into Rs500 billion profitable units.
In March this year, world’s top 10 investment groups were asked to submit proposals along with market assessment for issuance of Oil and Gas Development Company Limited’s (OGDCL) bonds, in accordance with Privatisation Commission Ordinance 2000.
PC intends to appoint a book running consortium for divestment of equity in OGDCL via a $500 million exchangeable bond with an upside option of $100 million.
This transaction could supplement the government’s efforts to raise funding from multilateral agencies including a proposed $2 billion by ADB and $900 million from the World Bank at very low rates.
The PC board had approved receiving proposals and detailed market assessment in its meeting on March 18, attended by representatives of the ministries of finance and petroleum and natural resources.
Citibank, J P Morgan, Nomura Investment Inc, Barclays Bank, Morgan Stanley, Goldman Sachs, Credit Suisse, Merrill Lynch and others had made presentations before the PC board. All these financial institutions would now be asked for updating their respective proposals and reports.
OGDCL bonds will build a diversified and high quality international investor base and will improve domestic capital markets with increased participation of foreign institutional investors and foreign direct investment flows.
Published in The Express Tribune, August 28th, 2010.
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