The Privatisation Commission (PC) here on Monday entered an agreement with the consortium of Citibank, Credit Suisse, J P Morgan and BMA Capital, for the appointment of Financial Advisory Consortia for the issuance of Oil & Gas Development Company Limited Exchangeable Bonds by monetizing up to 10 percent of Government of Pakistan shareholding (up to 430,000,000 shares) in OGDCL (transactions).
According to informed sources, the Citi consortium had asked for 72 basis points commission plus out of pocket expenses and legal fee. It was asked to match the offer of Standard Chartered consortium of 51 basis points. Later, upon further negotiations, the Citi was awarded a mandate at 17 basis points plus $1.4 million out of pocket expenses or 45 basis points all inclusive (commission plus fee).
This is a landmark deal, under which the consortium has been tasked to monetize up to 10 percent of GoP shareholding in OGDCL via an Exchangeable Bond transaction, says press release here. Secretary Privatisation Commission, Imtiaz Kazi and Syed Sikander Zulqarnain, representative of the consortium of Citibank, Credit Suisse, J.P. Morgan and BMA Capital, signed the Financial Advisory Services agreement for OGDCL Exchangeable Bond on behalf of their respective sides.
Citibank's Chief Country Officer, Arif Usmani and Laeeq Sheikh, PC Board member, were also present as witness to the contract signing. Following signing of the agreement, a kick-off meeting for OGDCL Exchangeable Bond also took place under the chairmanship of the Secretary Privatisation Commission.
The Representatives of State Bank of Pakistan, the Ministry of Finance and OGDCL were also present in the meeting. The Financial Advisory Consortium for OGDCL Exchangeable Bonds presented the transaction overview and also highlighted the performance benchmarks, timeline and responsibilities of all the professional parties involved in the transaction.
The consortium assured the Privatisation Commission that the deal would be finalised within the deadline's expectations of GoP. The meeting resolved to undertake the requisite activities on a fast-track basis to ensure timely completion of the transaction before the close of the current fiscal year. It may be recalled that Privatisation Commission had received presentations from the four banking syndicates a couple of weeks ago. They are: (A) Citi, J.P. Morgan, Credit-Swiss and BMA; (B) Standard Chartered, Merrill Lynch, Barclays and KSB; (C) Deutsche, Nomura, Silk & NBP; and (D) HSBC, UBS, BNP and MIB.
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