London Stock Exchange: Rs $1.08 billion OGDCL's convertible bonds to be launched by March

The Privatisation Commission will launch convertible bonds of Oil and Gas Development Company Limited (OGDCL) worth $1.08 billion by end of March 2011 while convertible bonds of Pakistan Petroleum Limited (PPL) worth $304 million by end of the current year at London Stock Exchange.
This was stated by Federal Minister for Privatisation Waqar Ahmed Khan while briefing National Assembly's Standing Committee on Privatisation, which met here with Khawaja Sohail Mansoor in the chair. Waqar said that the privatisation commission expected to generate $3 billion through launch of convertible OGDCL, PSO and PPL bonds. He added that $1 billion could be arranged through launch of convertible bonds in London Stock Exchange of the OGDCL.
He further said that the convertible bonds would be for 6 percent shares of OGDCL on 4.5 percent annual interest rate and proceeds of the bonds could be used for development of newly discovered oil and gas fields in Sindh and Khyber-Pakhtunkhwa. This would increase annual profit of OGDCL from existing $1.5 billion to $2.5 billion per annum, he added.
Secretary, Privatisation Commission Mohammad Ejaz Chaudhry, while briefing the committee said that PC had 12 active transactions, which include Pakistan Post, SME Bank Limited, Heavy Electrical Complex, Pakistan Machine Tool factory, Pakistan Mineral Development Corporation, National Power Construction Company, Morafco Industries, Islamabad Electrical Supply Company (IESCO), Peshawar Electrical Supply Company (PESCO), Quetta Electrical Supply Company (QESCO), Hyderabad Electrical Supply Company (HESCO), Faisalabad Electrical Supply Company (FESCO)and Jamshoro Power Company Limited.
The committee was further informed that 20 percent shares of IESCO and FESCO would be floated in stock market for Initial Public Offering (IPO) during the first quarter of 2011 while shares of GEPCO and MEMCO would be sold by the end of the year. The committee was informed about the active programme in the current privatisation policy i.e. Public private partnership (PPP) by off loading 26 percent shares to have government's majority control on professional, experienced and skillful management from the private sector for the value addition of Public Sector Entities (PSEs) and not to go for strategic sale as done in the past.
Chairman of the committee observed that owing to the past experience of privatisation of Pakistan Steel Mills, every effort should be made not to repeat such mistakes and also suggested to bring transparency in nominating members of the PC board by avoiding favouritism. Besides, he added that the stock exchanges should also be taken onboard.
Waqar told the panel that the process of capacity building and restructuring of PSEs was going on while enormous interest was witnessed among the investment banks and international business groups for equity linked instrument activity in Pakistan's PSEs during the recent Privatisation moot held under the auspices of the London Stock Exchange (LSE).
He said that though all stakeholders including professionals from various walks of life were among the 16 member PC Board, he welcomed four members of the Parliament, two each from National Assembly and Senate as its members for further institutional strength and to ensure the utmost transparency.
The Committee decided that prior to taking any transaction to the market, the same would be brought before the Standing Committee for discussion and to review the draft agreements to safeguard the interests of national assets and the public. The panel decided to discuss IESCO and a detailed briefing on equity linked instruments in its next meeting to be held on February 7.