ISLAMABAD: The Senate Standing Committee on Privatization, Wednesday, was informed by the senior officials of the Privatization Commission (PC) that the government is going to issue fresh Expression of Interest (EoI) for the privatization of the National Power Parks Management Company Ltd (NPPMCL) on March 21, 2022.
Briefing the committee meeting held under the chairmanship of Senator Shammim Afridi here, the Federal Minister for Privatization, Mohammed-mian Soomro, and Secretary, Privatization Division, Hassan Nasir Jamy said that the Coalition for Outsourcing and Privatization (CCoP) has approved the NPPMCL’s debt recapitalisation and refinancing scheme worth Rs110 billion. They said that accordingly, the EOI for debt recapitalization and refinancing of the NPPMCL from banks/financial institutes have been published on January 27th, 2022.
A pre-bid meeting with banks and financial institutes has also been met and the process of equity sale is also being reinitiated. The committee was of the view that the debt recapitalization and refinancing scheme for the outstanding receivables of the NPPMCL will aid the privatization process. The PC officials further informed that the ministry was able to save an amount of Rs380 million by the process. The officials further said that the PC will make all out efforts to complete the entire process within the next three months.
The committee was briefed that the Sindh Engineering Limited (SEL) is non-operational since 2008 and at a loss of Rs27.4 million after taxation as per the audited accounts available in 2016-17. The committee was further apprised that properties referred to be owed by SEL do not have titles cleared in SEL’s name including the agricultural land located in Kasur District, which is not in possession of SEL. For the property located at Mall Road Lahore, the ex-owner has filed suit for the declaration and transfer of property in their name. The SEL board and MD are to be appointed and the annual audited accounts are to be updated to ensure corporate structure existence to take necessary decisions on matters related to privatisation.
The ministry urged that a PC Board has approved the appointment of the financial advisor for the SEL and negotiations with the Top Ranked IP are in the process; however, resolution of encumbrances attached with the SEL require urgent attention from the MOIP for going forward in the privatisation of the SEL. The committee directed to probe investigation on the transferring of 448 acre land to the owner unilaterally by the then assistant commissioner. The committee also sought a report on the updated audit account and working of the company till to date. The committee showed its intent to summon the relative ministry in the next meeting for a briefing on the matter at hand.
The matter of divestment of 20 percent public shares of Pakistan Reinsurance Company Limited (PRCL) through book building was also discussed. The officials informed the panel that by virtue of being the sole reinsurer of Pakistan, all insurance companies must offer at least 35 percent of their reinsurance business to the PRCL. The committee was informed by the ministry that the CCOP approved divestment of 20 percent shares of the PRCL as part of the Active Privatization Program (APP). It was informed that the transaction structure was approved by the COP and ratified by the federal cabinet with 75 percent shares to be allocated to institutions and the high-net-worth individual (HNWIs), and the remaining 25 percent will be offered to the general public. The retail investors will also have the option to participate in the remaining 25 percent portion, however, if any portion offered to retail investors remains unsubscribed, it will be taken up by the institution and HNWIs who were declared as successful bidders in the book building. The matter is pending further deliberation by the PC in the CCoP on the issue of ownership by the government after the divestment of 20 percent shares.
Briefing on the matter of the privatization of First Women Bank Limited (FWBL) through strategic sale of 82.64pc shareholding of Government of Pakistan, the officials of the PC informed the committee that the CCOP approved Privatization of FWB as part of the active privatization program, however, due to the non-availability of audited accounts of financial year 2018-2019 and 2020 of the FWBL, and publication of the EOI to initiate the privatisation has been helped up. It was informed that the compilation of audited accounts of the bank were pending because the governing board of the bank was non-active during the period.
It was further informed that certain exemptions from federal government and the Securities and Exchange Commission of Pakistan (SECP) were required by the FWBL. The action of the management of the FWBL regarding obtaining the exemption from the SECP for convening the delayed AGM of 2018 and appointment of auditors for financial year 2019, 2020, and 2021 in the same AGM is also pending.
The committee sought a record of the pending AGM and the audit accounts by the last week of April for further deliberation to expedite the process of privatization
The president SME bank presenting details of employees and fresh appointments before the committee said that the bank was operating through a network of 13 commercial banking branches located in nine cities and a head office.
The committee was briefed on the shareholding pattern of the SME bank with 93.89 percent shares owned by the government and 2.56 percent by the National Bank of Pakistan.
The committee was also informed that 102 regular gratuity based employees and 80 contractual gratuity based employees are hired by the SME bank, 151 employees are inherited from Defunct SBFC and RDFC and are pension based. The PC officials informed the committee that a meeting of the finance minister is scheduled to decide on either the privatization or liquidation of the SME Bank Ltd.
Briefing on the matter of the privatization and the current status of the Pak-China Fertilizer Company, Haripur Khyber-Pakhtunkhwa (KPK) the officials of the PC said that the case is subjudice in the court. The outcome of the case will be shared with the committee as and when decided.
On the Privatization of Services International Hotel (SIH),Lahore, which is jointly owned by the National Insurance Company Limited (NIVL) 94 percent and Punjab Cooperative Board of Liquidation (PCBL) six percent, the committee was informed that two parties namely, M/s MCB Bank Limited and Faisal Town (Pvt) Ltd Islamabad participated in the bidding process and earnest money of Rs100 million was deposited by both parties. M/s Faisal Town (Pvt) Ltd emerged as the highest bidder at the conclusion of the auction process.
The cabinet ratified CCoP’s decision on the highest bid and bidder.
The buyer paid 30 percent of the sale amount. The distribution of sale proceeds is being finalised by the PC in consultation with the PCBL, CCCL/NICL, and LDA.
Copyright Business Recorder, 2022
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