The government has shelved the Pakistan Steel Mills Corporation (PSMC) strategic sell-off plan for one year and approved a scheme for its initial public offering (IPO) through bourses for 10 percent shares with additional 10 percent shares as green shoe option.
The Privatisation Commission will finalise the schedule for IPO after its approval by the PSMC''''s board. The green shoe option will be used in the case of over-subscription. Sources told Business Recorder on Monday that the Privatisation Commission will forward the IPO scheme to the PSMC management sometime next week for presenting it before the board.
The board endorsement in the case of PSMC is a pre-requisite for processing the IPO scheme. Sources said the Privatisation Commission will finalise the schedule for PSMC''''s IPO on receipt of PSMC''''s board approval.
After repealing the first privatisation by the Supreme Court of Pakistan (SCP), The Council for Common Interests (CCI) had approved the PSMC for strategic sell-off, but the Privatisation Commission was confused as to what could be the benchmark for it to work out the price for re bidding.
The ministry of Industries and Production''''s proposal, suggesting the Privatisation Commission to prefer IPO for PSMC over strategic sell-off provided the solution to the Privatisation Commission. Sources said the ministry was of the view that IPO and its trading on the bourses market for one year will provide the Privatisation Commission a benchmark for strategic sell-off.
An official said "We will see the IPO result and the share trading value in the open bourses market for one year and then take it as a bench mark for PSMC sell off if necessary. The government has already approved a BMR plan on the recommendation of the ministry of Industries and Production for rehabilitation and restructuring and released Rs 4.5 billion for it.
The PMSC management will utilise the funds to repair damaged parts of the mills, particularly, coke oven batteries, besides improving efficiency for increasing production. The mill''''s efficiency is a question for the management for a long time and it needs substantial improvement to make the entity an attraction to the buyers.
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