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January 29, 2020

PC board finalises FAs for OGDC, PPL divestment

Business

January 29, 2020

ISLAMABAD: The Board of Privatisation Commission has finalised and approved the names of financial advisors (FAs) for divestment of shares of the Oil & Gas Development Company (OGDCL) and Pakistan Petroleum Ltd (PPL), a government statement said on Tuesday.

“The PC board also accepted a dozen statements of qualification (SOQs) of the parties from Europe, Japan, South East Asia and Middle East that want to own National Power Parks Management Company (Pvt) Ltd (NPPMCL),” the official handout said.

The PC board that met here, with Federal Minister for Privatisation/ Chairman Privatisation Commission Muhammad Mian Soomro in chair, gave these approvals, it added.

The board, the statement said, also recommended transaction structure on sale of unproductive land owned by the federal government entities for submission to the Cabinet Committee on Privatization (CCOP) for approval. The NPPMCL manages two RLNG-based power plants i.e., 1223MW Balloki Power Plant and 1230MW Haveli Bahadur Shah Power Plant.

Talking to The News, Rizwan Malik, Secretary Privatization Commission said, “This shows high confidence by a broad-based international business community, including Europe, Japan, South East Asia, Middle East, in Pakistan as an investment hub”.

The FAs approved for OGDCL are a consortium comprising Credit Suisse, Arif Habib Ltd, AKD Securities, Citi Group, Habib Bank Ltd, and Next Capital, while for PPL, the FAs consortium consists of Credit Suisse, Arif Habib Ltd, and Topline Securities. “In a next two days we would notify their names and by next week we would start due diligence,” the PC secretary said.

Twenty three investors from all around the world, including entities that have never invested in Pakistan before, submitted SOQs for the NPPMCL privatisation, the statement said.

Out of 23 parties which submitted Expression of Interests (EoIs), 12 parties submitted their SOQs by the deadline. Some of the parties who submitted their SOQs also expressed their interest to form consortia with some of the other parties that had submitted EOIs.

The PC board-approved twelve parties are: Jera (Japan), Marubeni (Japan), Mitsui & Co (Japan), Asma Capital (Bahrain), Nebras Power (Qatar), Qatar Investment Authority (Qatar), the Fauji Foundation consortium (Pakistan), Edra (Malaysia), GPSC (Thailand), Contour Global (UK), KAPCO, and Atlas Pakistan.

The prequalified parties would commence due diligence of the power plants promptly with a view to achieving the earliest possible date for bidding and closing of the transaction timely.

The privatisation commission secretary further said the technical, financial, management and legal capabilities of the parties that submitted their SOQs along with their organisational structure were discussed with all the stakeholders.

“In order to expedite the privatisation of NPPMCL we are working in collaboration with all stakeholders and are cognisant of the fact that it is important to complete the desired transaction in a well defined time,” the statement quoted federal privatisation minister Mohammad Mian Soomro as saying.

Pakistan is likely to offer Malaysia a possible seven percent stake in OGDCL, during Prime Minister Imran Khan's scheduled visit to the south east Asian country next week, official sources told The News. The petroleum division in a statement on Monday said Malaysian energy giant Petronas was likely to enter Pakistan to exploit this sector’s immense untapped potential. “There is a possibility of Petronas acquiring divested shares from OGDC, PPL (Pakistan Petroleum Ltd), and Mari Petroleum that will be divested to shared partners,” said Nadeem Babar, Special Assistant to PM on Petroleum, talking with Ikram Muhammad Ibrahim, High Commissioner of Malaysia, who called on him and the energy minister.