The Privatisation Commission (PC) has convened a preliminary meeting on Wednesday to workout strategy for floating the Oil and Gas Development Company Limited''s (OGDC) 10 percent shares (500 million shares in total) as global depository receipts (GDRs) and 2 percent shares (100 million shares) in the local market.
The officials of the Privatisation Commission, OGDC, Law Division and representatives of the lead manager will attend the meeting. The OGDC team will again meet the same evening for in-house consultations. Sources told Business Recorder on Tuesday that London Stock Exchange is being considered as the first option to float GDRs. London Stock Market is always an ultimate destination for major global transactions and Pakistan is also following the same route for its first GDRs offering.
They said Luxembourg Stock Exchange was also under consideration as an option for GDRs offering, but the authorities in Islamabad do not prefer it for a major transaction like OGDC global offering.
The offering will be made simultaneously in the local and international market. In order to attract the local investors, IPO at home will be subsidised. However, its rates will be slightly less than the actual value of the shares in the open market at the time of offering.
In the past, the government had offered OGDC shares through initial public offering (IPO) at 50 percent subsidised rates which received overwhelming response from the small and big investors.
Sources said the authorities were yet undecided about the timeframe for the offering. The government wanted to complete the transaction before the closing of the current fiscal year basically to plug the current account deficit from the money raised through the offering. However, the lead manager, a consortium comprising Citigroup, Goldman Sachs and BMA Capital, has suggested some delay to take full advantage of the move. The lead manager was of the view that June was not a proper time for such a big transaction as at that point in time all the countries, which were being targeted for raising the money go on holidays.
Sources said the authorities were seriously considering the lead manager''s suggestion to delay GDRs offering till September this year.
It''s not literally possible to meet the deadline of June 30, for technical reasons of the offering. The government is required to provide audited accounts of OGDC to London Stock Exchange to give the actual financial picture to the prospective bidders, which will take at least 6 weeks and almost 6 weeks will be required by the company to meet the condition of the audited accounts.