PSM’s majority stake sale bidding set for March-April

ISLAMABAD: The government is expecting to complete the handover of up to 74 percent stake in loss-making Pakistan Steel Mills Corporation (PSMC) to private sector soon, while targeting to hold bidding in March-April 2022, officials said on Wednesday.

Eight interested parties/investors have shown interest in participating in it and six of them have submitted their statements of qualification (SoQs).

The scheme of arrangement (SOA) has been submitted with the SECP and after that approval, the bidding date would be fixed.

These are the minutes of a meeting, chaired by Federal Minister for Privatisation, Mohammedmian Soomro, to review the progress of privatisation process of different state-owned entities.

Officials, carrying out the process, updated the minister on ongoing privatisation programmes of Jinnah Convention Center (JCC), House Building Finance Corporation Limited (HBFCL), First Women Bank, PSMC, Pakistan Reinsurance Company Limited, National Power Parks Management Company Limited (NPPMCL), and others.

One official said Capital Development Authority (CDA) was yet to provide the minutes of its board meeting regarding the status of the Jinnah Convention Center (JCC), after that they would be able to go forward to expedite the process for its sale to private sector.

They also said for the sale of remaining federal government’s properties, the Financial Advisory Services Agreement (FASA) terms were being discussed with top-ranking interested parties. The issues related to the divestment of up to 20 percent shares of Pak Re-insurance (PRCL) were being taken up with the Ministry of Commerce and PRCL and Federal Minister for Privatisation would hold a meeting with Advisor to Prime Minister on Commerce, to discuss the matters related to the aforementioned divestment.

On debt arrangement for two RLNG power plants of National Power Parks Management Company Limited (NPPMCL), the minister was informed the request for proposal (RFP) regarding initiation of the process for the replacement of government’s excess equity and loan through commercial borrowing had been finalised in consultation with stakeholders, to be initiated by NPPMCL.

The federal government was encouraging commercial banks to participate as lenders to successfully complete the subject transaction, officials said.

NPPMCL was formed with an objective to reduce the electricity/power demand and supply gap in Pakistan. The government is now considering divesting up to 100 percent of its shareholding in NPPMCL to a potential investor, along with management control.

As part of the privatisation process, the Potential bidders will be required to re-finance government/Pakistan Development Fund Ltd (PDFL) funding and NPPMCL’s existing commercial debt through foreign and/or local debt financing.

Updating the minister on the current status of House Building Finance Corporation (HBFCL), officials said Ministry of Privatisation would issue expression of interest (EOI) for investor after approval of summary regarding HBFCL Board of Directors from PM and Cabinet. The summary had already been forwarded to PM office in this regard by Finance Division, officials said.

The meeting was informed the board of First Women Bank in its recently held meeting had appointed an auditing firm to complete the bank’s audit for three preceding years to complete the privatisation process.

The officials further said that refence price options for Heavy Electrical Complex would be placed before Cabinet Committee on Privatisation (CCoP), as the bidding/transaction for HEC was to be completed in the upcoming Speaking on the occasion the minister said privatisation was a major part of current government’s economic reforms agenda.

“The ministry is making all out efforts to resolve the related issues so the targets could be achieved in stipulated time.” Soomro urged all the concerned officials to expedite the resolution of issues that might hinder the timely completion of these transactions.