ISLAMABAD: The government is likely to sell GoP shares in First Women Bank Limited (FWBL) to United Arab Emirates (UAE) either through Privatisation Commission or Inter-Governmental Commercial Transactions Act, 2022 and constitute a Negotiation Committee to approve price discovery mechanism and reference price, well informed sources told Business Recorder.
Sharing the details, sources said, on February 6, 2024, Ministry of Privatisation stated that the Cabinet Committee on Privatisation (CCoP), in its meeting held on October 31, 2018, had placed the First Women Bank Limited (FWBL) on the Active Privatisation Programme, duly ratified by the Federal Cabinet on November 1, 2018.
Accordingly, Privatisation Commission (PC) issued a Request for Proposals (RFP) on October18, 2019, inviting Technical and Financial Proposals. After completing the technical and financial evaluation of the bids, the consortium comprising MIS Bridge Factor & National Bank of Pakistan was appointed as the Financial Advisor for the privatisation of FWBL with the approval of Board of the Privatisation Commission (PC) Board on December 27, 2019. Accordingly, Financial Advisory Services Agreement (FASA) was signed on January 27, 2020.
FWBL sell-off: Minister briefed about status of accounts
The Ministry of Privatisation further noted that the due diligence report of FWBL was finalised in June 2020 and the Cabinet Committee on Privatisation approved the Transaction Structure on August 21, 2020. However, owing to the non-availability of audited accounts (FY 2018 to the FY 2021), further steps including the issuance of EoI/RSOQ, could not take place.
The FASA was signed on January 27, 2020 for a period of two years, and was extended for another fifteen months till April 26 2023. The FASA was further extended, for another period of twenty- four months, till April 25 2025, with the approval of PC Board in its 23 meeting.
The Ministry of Privatisation further noted that the Government of UAE conveyed its interest in buying the Federal government’s shares in FWBL by entering into a formal agreement as per the relevant law and rules framed there under.
Federal government, in exercise of the powers conferred by Section 40, read with Section 25(f), of the Privatisation Commission Ordinance 2000 (III of 2000) had approved the Privatisation Commission (Government-to-Government Agreement Mode, Manner and Procedure) Rules, 2023, which provide for Government-to-Government transactions in terms of the Inter-Governmental Commercial Transactions Act, 2022, with the approval of the Federal government.
It was explained that Rule 3(2) of the said rules provides that the Federal government while approving the reference price in terms of sub-rule (1) may: direct the Commission to proceed further with the bidding process; or refer the transaction, along with the reference price and price discovery mechanism as approved by the Federal government, to the Cabinet Committee constituted under sub-section (1) of section (4) of the Act for constitution of a Negotiation Committee and approval of the price discovery mechanism and reference price, or otherwise.
Financial Adviser initiated the process for valuation of the shares of Federal government in FWBL by employing the methodologies as provided in rule 3(1)(a)(iii) of the Privatisation Commission (Government-to-Government Agreement Mode, Manner and Procedure) Rules, 2023.
In order to consider the request of the Government of UAE for buying the Federal government’s shares in FWBL by entering into a formal agreement and in terms of sub-section (2) of Section (3) of the Privatisation Commission (Government-to-Government Agreement Mode, Manner and Procedure) Rules, 2023,the Federal Cabinet was requested to: (i) direct the Commission to proceed further with the bidding process; Or (ii) refer the transaction to the Cabinet Committee constituted under sub-section (1) of section 4 of the Inter-Governmental Commercial Transactions Act, 2022 for constitution of a Negotiation Committee and approval of the price discovery mechanism and reference price as contained in the said Act and the Rules.
After detailed discussion the Cabinet approved the proposal of Privatisation Ministry with respect to FWBL.
Copyright Business Recorder, 2024