Privatisation Commission on Monday formally announced that the government has postponed Exchangeable Bonds of Oil and Gas Development Company Limited (OGDCL) worth $500 million indefinitely due to unfavourable conditions.
Referring to reports regarding OGDCL EB transaction, published/telecast in a section of print and electronic media during the recent past, a spokesman of the PC while clarifying the factual situation said that it was the intention of the Government of Pakistan to complete the transaction within the previous fiscal year, however, the international financial markets became extremely volatile towards the end of the fiscal year due to the Greece crisis and weak economic data emerging from USA.
These facts were highlighted to the Cabinet Committee on Privatisation (CCOP) and it was decided in the meeting that the transaction would only be launched at an opportune time as and when the markets recover, he said. Elucidating the details of the process of the transaction, the spokesman informed that the CCOP approved floating of OGDCL Exchangeable Bonds (EB) in its meeting held on 8th March 2011. The OGDCL EB allowed for the return of the GoP to international capital markets after prolong gap of four years. It was also decided that due to the hybrid nature of the instrument, Privatisation Commission and Finance Division would jointly manage the transaction. The hiring of a consortium of financial advisors was completed in May when Citibank, J.P. Morgan, Credit Suisse and BMA were selected from a host of global investment banks, all very keen on the transaction.
He further stated that the CCOP also decided that a series of investor meetings would be held for the GoP and OGDCL in the third week of June in Hong Kong, Singapore and London. A consortium of leading global investment banks comprising of Citibank, J.P. Morgan and Credit Suisse arranged these meetings for the GoP and OGDCL. These meetings were not road shows for any specific transaction and no terms of any specific transaction were shared. The meetings provided the opportunity to GoP to share with international financial market participants the key economic reforms undertaken by GoP, its planned privatisation programme and to showcase strong state-owned entities such as OGDCL, he clarified.
The PC spokesman added that the meetings were well received by the global financial community. The purpose of the meetings was to familiarise the international financial community with developments in Pakistan, since it has not entered the international capital markets for the last four years. The GoP would continue to review its options for accessing the international markets at an opportune time, the spokesman concluded.-PR