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January 27, 2021

PSM's core assets valuation to be completed over weekend

Business

January 27, 2021

KARACHI: The government is expected to complete the valuation of Pakistan Steel Mills’ (PSM) core assets by the end of this week to sell them as part of the revival plan of the lose-making government entity, officials said Tuesday.

The revival of PSM will be undertaken as per the cabinet’s decision according to which core assets of PSM will be transferred to a subsidiary owned wholly by the PSM.

The exercise will lead to the sale of majority shares of the subsidiary formed without transfer of full ownership, officials told a meeting.

The meeting co-chaired by Minister for Privatisation Mohammedmian Soomro and Minister for Industries and Production Hammad Azhar reviewed and discussed the progress made in the PSM’s revival.

The meeting decided to ‘strictly’ follow the timeline and complete the task in the defined period and both the ministers resolved to extend their support to the maximum extent to solve the issues which may have arisen.

The government sacked more than half of PSM’s over 9,000 employees to make a way for the restructuring of the company with losses piled up to Rs160 billion in addition to accumulated debt of Rs230 billion. PSM has been incurring losses for over a decade now. Last year, the cabinet committee on privatisation approved the privatisation structure to sell the company’s core assets to the private sector.

The government decided to privatise 47 state-owned entities over the next three years. Of them, privatisation of 19 public sector enterprises (PSEs) is going on fast-track basis.

PSM is among 12 PSEs, including Pakistan Reinsurance Limited, Heavy Electric Complex, Services International Hotel and LNG power plants whose privatization is at the advanced stage.

PSEs which were privatised in the past are accumulating profit without considering the public interest.

They focus on profit maximisation and therefore the government should ensure a check and balance to save public interest, according to an analyst.

The ministry of privatisation said it is actively following the scheme of arrangement and transaction structure has already been approved.

The ministers were briefed about the current status and progress and probable timeline for the completion of said transaction.

The valuation of core assets to be transferred to a new subsidiary is underway and will likely be completed by 31 January.

Moreover, the other matters relating to the use of jetty, registration of a new subsidiary and others were deliberated upon in detail.