Privatization Commission will invite expression of interest (EOI) this month for financial advisor to divest government shares in Mari Petroleum Company Limited (MPCL), sources said. The defense sector is a major shareholder in MPCL with around 55 percent shares in the entity.
The military sources said the shares of defense in MPCL were not listed or else its claim of a private corporate entity gets tainted, sources told this correspondent. Out of a total of 152 PSEs (Public Sector Entities) only 97 have been privatized while the rest remain on the list. The hurdle in the sale of MPL is the perception that it should be privatized at much cheaper rates which accounts for deferring the sale or placing it in cold storage in the past, sources added.
Military sources further revealed that the privatization of MPCL is not on the cards at the moment. On December 18, 2018, the Privatization Commission board considered the request of the Ministry of Energy (Petroleum Division) to remove MPCL from the privatization programme, terming it a ''well-managed asset'', according to officials.
Petroleum Division took the position that being a strategic investor, the government should not privatize MPCL that gave Rs330 million in dividend over the last three years. The Ministry argued that dividend distribution was capped at 45 percent till June 2024 and once the ceiling was removed the dividend could increase to Rs290 million per annum.
However, the board decided to go ahead with the divestment plan as it was one of three enterprises that could fetch handsome proceeds. The officials have estimated proceeds of roughly Rs30 billion from divesting 18.4 percent of government stake in MPCL, according to officials.
In May 2016, the CCOP had not approved delisting of MPCL from the privatization programme and instead approved, in principle, the divestment of government shareholding either through joint venture partners or stock market. Oil and Gas Development Company (OGDC) and Fauji Foundation, the other two key stakeholders, have already refused to buy government shares. The four companies including MPCL, Lakhra Coal Development Company, Services International Hotel and First Women Bank Limited (FWBL) are among the eight public sector enterprises that the Cabinet Committee on Privatization (CCOP) in October 2018 short-listed for privatization in the first phase. The CCOP picked these entities out of the 62 originally approved by the Council of Common Interests for privatisation.
On December 26, 2018, CCoP also gave the go-ahead to divest residual government shares of 18.39 percent in Mari Petroleum Company Ltd.
The government intends to divest up to 18.39 percent of its shareholding in Mari Petroleum to foreign and domestic institutional inve-stors, high net worth individuals and the general public through a secondary public offering on the Pakistan Stock Exchange.
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