PSM transaction advisers to be appointed today

ISLAMABAD: The Privatisation Commission is all set to appoint financial adviser on Thursday for the transaction of loss-making Pakistan Steel Mills out of the four contending firms for the job, an official said.

Pak China Associates, Faisal Bank, JS, iconsult, Invest Consult, a Russian firm, and HLB Ijaz Tabussum & Co have offered their the services for the transaction.

“We have received bids from four companies, out of which, we would shortlist two or three bidders on Thursday and then we would issue them request for proposals for technical, financial, legal and operational proposals,” Rizwan Malik, federal secretary for Privatisation Commission told The News. “We would open their bids within 15 working days. And then negotiate with the bidder(s) the agreement and also give 10 days for redressal of grievances, if some bidder has any objection.”

The secretary said final advisory services agreement with the successful bidder (s) would be signed by November 10 to 12, 2019. “After that we would do due diligence based on technical, financial, legal, and operations of the PSM. The financial adviser would then give the transaction structure which would be then submitted to the cabinet committee on privatisation and the federal cabinet for approval”.

After the approval from these bodies, the government would ask for expression of interests from the potential investors, local and international, to submit their bids for carrying out the revival of the mills, he added.

Secretary said investors having industrial and steel sector experience could apply for the PSM revival task.

The PSM’s accounts had not been audited since 2015 and so the government had asked its management to finalise the audit of these last three years till June 2018. "The management of the steel mills has committed that by November 2019, it would submit the audited accounts to the government."

The last time the PSM posted a profit (Rs9.5 billion) was in fiscal year 2007-08. Since then, its financial health has been crumbling and it accumulated huge losses during Pakistan People’s Party and Pakistan Muslim League-Nawaz (PML-N) tenures, and ultimately it was closed in June 2015. The PSM’s current total losses are around Rs200 billion. In August 2019, the cabinet committee on privatisation had asked the privatisation ministry to select any 10 units from the privatisation list and hire financial advisors, collectively or separately, as per the requirement for the selected units’ denationalisation.

A senior official at Privatisation Commission said that around half-a-dozen companies from Russia and China had already shown their interest in taking up the job of reviving the ailing PSM.