ISLAMABAD: The Privatisation Commission (PC) has convened the board meeting on January 20, 2022 to officially finalise names of four parties to be declared qualified for participation in Pakistan Steel Mills (PSM) revival/privatisation plan, well-informed sources in PC told Business Recorder.
PC, had sought Statement of Qualifications (SoQ) from investors/parties interested in purchase of 51 to 74 per cent shares of PSM. Scheme of Arrangement was submitted by PSMC with SECP on August 27, 2021, while Expression of Interest (EoI) for prospective investors was published on August 31, 2021 wherein deadline for submission of EoI was September 30, 2021 and SoQ was set October 15, 2021. However, the deadline for SoQ extended till December 15, 2021 on the request of interested parties.
According to sources, the PC has identified four parties as qualified and two parties as disqualified on the basis of information/ documents provided to the Commission.
The key factor in determining the qualification is: organisation structure, financial capability, legal capability, future plans disclosed by the parties and various other ingredients which are fundamental in determining the qualification and disqualification.
The sources said, Pak-China Investment Company with BOC International China Co Ltd, are the joint lead financial advisors in privatisation of PSM. The potential bidders identified as standalone parties are four: namely Baosteel Group Xinjiang Bayi Iron & Steel Co Ltd, Maanshan Iron & Steel Company Limited, Tangshan Donghua Iron and Steel Enterprise Group Co. Ltd and Esfahan Steel Company. Besides two consortiums also have participated in prequalification namely Jianlong Group & MCC Group and Pakistan State Oil Company Limited & MetProm Group.
The sources claim that four parties which have been recommended to be pre-qualified are Baosteel Group Xinjiang Bayi Iron & Steel Co. Ltd, Maanshan Iron & Steel Company Limited, Tangshan Donghua Iron, Steel Enterprise Group Co. Ltd and Jianlong Group & MCC Group. The other two parties, in which stand alone is Esfahan Steel Company and consortium of Pakistan State Oil Company Limited & MetProm Group are recommended to be disqualified.
When contacted, the PC spokesperson confirmed that the PC Board will meet next Thursday but did not share information about the parties who submitted SoQs.
PSMC’s Stakeholder Group, headed by Mumrez Khan, has expressed its reservations on PIDC advertisement of October 2021, in which Expression of Interest (EoI) was invited for pre-qualification of consultants for feasibility study and design of an Industrial Zone plus Township at Pakistan Steel Mills 9,000 acres area at Bin Qasim, Karachi.
The Group has suggested that PIDC should select and acquire some other land far away from these residential colonies for development of Industrial Parks after consultation with Government of Sindh and other stakeholders due to the environmental issues.
The Stakeholder Group maintained that the audited financial statements of PSMC show accumulated losses of Rs 217.48bn and total liabilities stood at Rs 307.14bn as on December 31, 2020. So, unless the total liabilities of all PSMC Stakeholders, ie, employees, contractors, dealers, suppliers and creditors, etc, are settled completely, such splitting of PSMC assets like plant, land segments etc. and offering these to other industries in form of Industrial Parks, Special Economic Zones (SEZ) and Industrial Townships is legally not fair and will compel the aggrieved Stakeholders to enter into litigation against PSMC, MoIP, PIDC and other departments involved in these unlawful transactions. M/s Arif Habib Group review petition against CP 9/2006 & CA 327/2020 filed by PSMC are still pending in Supreme Court of Pakistan for final disposal.
Copyright Business Recorder, 2022
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