ISLAMABAD: Privatisation Commission (PC) Board on Thursday granted approval to the prequalified parties, mostly Chinese and Russian, for the revival of Pakistan Steel Mills Corporation (PSMC).
The mill is non-functional for the last more than six-and-a-half-years and has racked up tens of billions of rupees in losses and liabilities.
The Board met here with Federal Minister for Privatisation, Mohammedmian Soomro in chair. Federal Secretary Privatisation, Interior, Board members and Chairman Capital Development Authority (CDA) attended the meeting.
The board deliberated upon the report regarding prequalification of potential investors for bringing Pakistan Steel Mills (PSM) back in production and profits.
Six parties had submitted Statements of Qualification (SoQs) before and a prequalification committee was formulated to scrutinise the prequalified parties.
The PC Board also nodded the prequalified investors/parties. A Virtual Data Room (VDR) would be opened for prequalified bidders for their due diligence for a period of thirty days, the meeting was told.
It must be noted that Privatisation Commission has also submitted the Scheme of Arrangement (SOA) with the Securities and Exchange Commission of Pakistan (SECP). Once approved, the government would then fix the bidding date.
The erstwhile Soviet Union, now Russia, had built this industrial unit for Pakistan in 1970s. This 19,000-acre facility has not produced steel since June 2015.
The government is offering at least 51 percent or up to 74 percent shares capital of Pakistan Steel Mills Corporation together with management control through bidding process. Two Chinese firms including Pakistan-China Investment Company and Bank of China International Co Ltd are the joint advisers for the transaction.
The Board also discussed the matter relating to Jinnah Convention Center (JCC). It was decided the CDA would issue a consent letter to Privatisation Commision, as directed by the Federal Cabinet, regarding the conversion of JCC land from amenity(ies) to commercial. The Ministry of Privatisation clarified the infrastructure charges incurred would be borne by the successful investor.
It was also agreed the CDA and financial advisers (FAs) from the Ministry of Privatisation would evaluate the property and make a comprehensive evaluation report regarding infrastructure cost in possible scenarios of land use in future for the investors, within two weeks.
It was also brought to the knowledge of the meeting that after receiving the letter from CDA for conversion of the plot into commercial, the VDR for the prequalified investors/parties would be opened.
Officials also updated the PC Board on the transaction status of Heavy Electric Complex (HEC). The Board, while considering the way forward on the privatisation of HEC, after detailed discussion and deliberation, agreed and allowed to extend bidding date for up to one month as requested by one of the potential bidders.
The Board also learnt about the updated status of legislative matters and the receivables & payables thereof.
Mohammedmian Soomro, the federal privatisaion minister, tasked the legal team to rigorously pursue the matter and bring the money payable to the ministry.
Soomro later chaired a meeting regarding House Building Finance Company Limited (HBFCL). It was attended by Secretary PC, Board members, DG, Transaction Manager and advisers/consultants.
The government is in the process of privatising HBFCL by selling up to 100 percent shares along with management control.
In this regard, invitations of EOIs were advertised on December 27, 2021 and re-advertised on January 17, 2022 for potential investors. The Financial Adviser Consortium (FAC) led by MCB Bank, informed the meeting about the response of potential investors. Nevertheless, it was observed that engagement with more local/ global investors was needed, which would require some additional time for evaluation. Hence it was proposed by FAC to extend the date for submission of the EOIs. HBFCL privatisation is one of the prominent transactions due to be completed in 2022.