Privatisation Commission (PC) has reportedly served transfer notice to Fauji Foundation and OGDCL based on the closing price of Mari Petroleum Company Limited (MPCL) shares on January 27, 2017 with a 7.5 percent discount as per a decision of the Cabinet Committee on Privatisation (CCoP), well-informed sources told Business Recorder.
The PC Board in its meeting on January 17, 2017 had approved the following: closing price of MPCL's shares on the day prior to which the transfer notice is being served to the JV partners or six months column weighted average price calculated on the day prior to which the Transfer Notice is to be served. However, CCoP, in its meeting held on January 27, 2017 approved the divestment of 18.3% GoP's shareholding in Mari Petroleum Company Ltd either through the JV Partners (Fauji Foundation and OGDCL) or the domestic stock exchanges.
"Yes, we have acted as per CCoP decision. The JV (both partners) is expected to respond to the GoP within 45 days of receiving the letter from PC," said an official on condition of anonymity. According to official documents, CCoP on May 7, 2016, approved the divestment of Government of Pakistan's (GoP) shareholding in Mari Petroleum Company Ltd either through the JV Partners (Fauji Foundation and OGDCL) or the stock market.
On Privatisation Commission's request to initiate the transaction, Ministry of Petroleum and Natural Resources (MP&NR), in its letter of May 11, 2016, communicated to the PC that both the JV partners, i.e. OGDCL and Fauji Foundation, desire that the GoP should give them the requisite notice (transfer notice) of the intention to divest its residual shareholding in MPCL, as they are entitled to the 'first right of refusal' under the relevant clauses (i.e. clause 3) of Participation and Shareholders Agreement, 1985 and Supplemental Participation and Shareholders Agreement, 1992 (hereinafter 'the Agreement').
Accordingly, it was decided that the GoP would offer the shares to the JV partners and issue the transfer notice in line with the clause 3.02(a) of the Agreement, which reads as follows: "The seller shall serve the other parties with a notices in writing (the "transfer notice") of his intention to sell, assign or otherwise transfer the shares in question, and shall at the same time deposit the share certificate(s) in respect of such share(s) with the Company along with blank executed share transfer deed(s) and authority in favor of Managing Director to take action as contemplated....hereunder. The transfer notice may specify the price per share at which the seller proposes to sell, transfer or otherwise assigns the share in question".
MPCL initially communicated to PC that their Auditors have refused to carry out valuation exercise due to a potential conflict of interest. However, later, through an email of July 25, 2016, it was communicated by MPCL that their Auditors have agreed to carry out the valuation exercise, subject to certain pre-conditions.
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