The Privatisation Commission (PC) has released the details of 32 public sector entities (PSEs) privatisation of which would be completed within two years. The government has put on sale five oil and gas sector entities (upstream and mid stream, three oil and gas (down stream), nine banking and finance, nine power sector and six industries, transport & real estate sector entities on privatisation list.
Each transaction has different mode of privatisation. Most of the entities which have 100 percent government holding will be divested with management control. The government's shares in other entities will be offloaded through initial public offering (IPO) and secondary public offering (SPO). It is not clear how much shares, the privatisation commission has decided to offload in capital market, sources said.
The five oil and gas sector entities are Oil and Gas Development Co Ltd, Pakistan Petroleum Ltd, Mari Petroleum Ltd, Government Holding Privatise Ltd and Pak Arab Refinery Ltd. According to the PC, government holding of 85 percent share in Oil and Gas Development Co Ltd (OGDCL) will be offloaded through capital market (preferably International). Similarly, 85 percent share in Pakistan Petroleum Ltd (PPL) will be offloaded in internal and domestic capital markets.
The government will also off load its 20 percent shares in Mari Petroleum Ltd through secondary public offering in capital market (SPO) or block sale to JV partner. The government owns 100 percent shares in Government Holding Private Ltd (GHPL) which will be disposed of by divestment of working interest of specific block or IPO. Similarly, 60 percent shares in Pak Arab Refinery Ltd (PARCO) will be offloaded through IPO subject to consent of JV partner.
Three oil & gas (downstream) entities including Pakistan State Oil Co Ltd (PSO), Sui Southern Gas Co Ltd (SSGC), Sui Northern Gas Pipelines Ltd (SNGPL) are also on the privatisation list which was approved by Cabinet Committee on Privatisation. The privatisation mode which will be applied for disinvesting 25 percent shares of PSO is segregation of business segments followed by divesting the suitable business segment. The 60 percent shares of government in SSGC and 36 percent shares in SNGPL will be disinvested by segregation of various operations followed by privatisation, where possible.
In banking & finance sector, government's holding in nine entities would be disposed of. The government's 42 percent shares in Habib Bank Limited (HBL), 20 percent in United Bank Ltd (UBL), 10 percent in Allied Bank Limited (ABL) will be auctioned through Secondary Public Offering (SPO), whereas, the 100 percent holding of government in State Life Insurance Corp (SLIC) will be floated in capital market through Initial Public Offering.
Two options will be undertaken in offloading 76 percent shares in National Bank Limited (NBP)-d divestment with management control (preferably) or block sale to qualified investors. National Insurance Co Ltd (NICL)'s 100 percent equity will be divested with management control followed by IPO. While, another 100 percent holding in National Investment Trust Ltd (NITL) will be divested with management rights of individual fund(s). Small & Medium Enterprise (SME) Banks 94 percent shares will be divested with management control or merger with tier II / III bank. The 51 percent shares of Pakistan Reinsurance Co Ltd (PRCL) will be disposed of with management control.
Nine Power sector state owned enterprises are also included in the privatisation list which has approval of CCI and CCoP. Different modes of privatisation will be applied in each transaction. The 100 percent equity in Heavy Electrical Complex (HEC), Islamabad Electric Supply Co Ltd (IESCO), Faisalabad Electric Supply Co Ltd (FESCO), Hyderabad Electric Supply Co Ltd (HESCO), Jamshoro Power Generation Co Ltd (JPCL), Northern Power Generation Co Ltd - Thermal Power Station - Muzaffargarh, Lakhra Power Generation Co Ltd (LPGCL) and National Power Construction Co (NPCC) will be divested with management control. However, the 46 percent shares in Kot Addu Power Company Ltd (KAPCO) will be offloaded in local and international capital markets.
The government has also selected six state own entities in Industries, transport & real estate sector which will be offered to potential buyers. Pakistan Steel Mills Corp (PSMC)'s 100 percent shares will be divested by management control. Same mode of privatisation will be applied to Pakistan National Shipping Corp (PNSC) whose 90 percent shares will also be divested with management control.
The government's 25 percent holding in Pakistan Engineering Co Ltd (PECO) will be disposed of after retirement of GOP liabilities initially followed by transfer of management to private partners. Pakistan International Airlines Corp (PIAC)'s 100 percent government equity will be disposed of after restructuring followed by divestment of 26 percent GoP equity stakes to strategic partner with management control.
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