Government eyes to privatise Pakistan Steel by January

KARACHI: Government officials held preliminary meetings last week to discuss the privatization of loss-making Pakistan Steel Mills (PSM), expected to go under the hammer by the year end, officials said on Tuesday.
The working group, which included representatives of the ministry, the PSM and financial advisors, discussed regulatory issues and other topics, sources said.
“We had a kick-start meeting last week, or about 10-days ago,” Muhammad Zubair, minister of state for privatization told The News. “The government is committed to privitise the entity by December 2015 – January 2016” if all remains well – particularly on political front.”
Zubair said the government of Pakistan Muslim League-Nawaz has started “soft marketing” of the steel complex, however, declined to share details of the planned privitisation. “It will be too early to share information on PSM transaction,” he said.
Earlier, the government was considering multiple options for its privatization, including selling minimum 26 percent shares with management right, it was learnt.
Zubair said the privitisation commission has told the financial advisor in the traction on ‘tough timeline.’
In April last the government has chosen a consortium; consist of China Development Bank Securities Co. Ltd., Pak China Investment Company Limited, Iqbal A Nanjee & Co. Pvt. Limited, Sinosteel, Abacus Consulting Technology (Pvt.) Ltd., Cornelius, Lane & Mufti & PWC CA as adviser on PSM privitisation.
Sources said a team of the financial advisor would start visiting plants and machinery of the PSM from Wednesday (today). All departmental heads have been advised to provide data required to the financial advisor for evaluation.
They added that in recent months, a survey conducted by Anjum Adil and Associates has projected the worth of Pakistan Steel land (19,019 acre), plant and equipment to Rs122 billion against Rs70 billion in 2011-12. Pakistan Steel Mills’ plants and equipments are set up roughly at an area of 10,000 acres of land.
The state-run mills mostly produce hot-rolled coils. Other finished products include cold-rolled coils, billets, and pig iron. Average production of mills stands at 22-23 percent in the current fiscal year (2014-15) against just six percent during the last fiscal.
The International Monetary Fund, which is over halfway through a $6.6 billion bailout package to support the country’s economy, had asked the government to privatise loss-making state enterprises. The Fund hopes privatistion will plug holes in the public purse and make the companies more efficient.
Pakistan Steel, facing accumulated losses of Rs290 billion is one of the first big firms to go for privitisation under a government’s plan to raise billions of dollars by the end of 2015.