Mystery about the privatisation of Heavy Electrical Complex (HEC), a subsidiary of Ministry of Industries and Production, is deepening with each passing day and new documents reveal that the Cabinet Committee on Privatisation (CCoP) had approved M/s Cargill Holdings' offer of Rs 100 million with liabilities of Rs 1.2 billion. Islamabad High Court (IHC) is hearing the case.
According to documents, the PC Board, after thorough deliberations in its meeting on March 11, 2015, considered the recommendations of the negotiation committee and mandated the Chairman and Secretary of the PC to conduct further negotiations with the sole bidder. The final offer of the buyer was as follows "M/s Cargill Holding offers to take up all the existing bank liabilities of the HEC employees and pay Rs 100 million in cash to the Privatisation Commission."
The PC Board deliberated the offer made by the buyer, keeping in view all the aspects of the transaction, and recommended to CCoP to approve the buyer's offer of Rs 100 million.
The CCoP, in its meeting on March 24, 2015, considered the recommendations of the PC Board and approved the conditional sale of HEC, subject to fulfilment of the following conditions: (i) the buyer shall assume all current and future liabilities of the HEC; (ii) the buyer shall also be responsible to take up the liabilities pertaining to the gratuity and provident fund of the employees and ;(iii) the buyer (M/s Cargill Holdings) shall not benefit from any previous losses and potential tax adjustments in future, if any.
Pursuant to the CCoP decision, negotiations were held again between the PC and the buyer
" If the transaction was approved for Rs 100 million by the CCoP then why the need for further negotiations," questioned an insider who is familiar with " off the record" interactions between the PC officials and the potential sole buyer.
The documents further disclose that after negotiations with the Chairman PC and Secretary PC, M/s Cargill gave two options with the following revised offer: Option 1:The company will acquire 97 per cent of the shares in HEC in consideration for the payment in case it was increased from 550 million to Rs 600 million; (1.1) GoP undertakes to pay off all the outstanding liabilities including but not limited to operational expense, employees' wages, any utilities, any banking credit facility and/ or any contingent liabilities; (1.2) GoP undertakes to transfer the asset/ machinery in the running condition; (1.3) GoP undertakes to ensure that the entire operation of HEC is free of any encumbrance, lien or mortgage etc and ; ( 1.4) Cargill undertakes that it will make payment upon transfer of clear legal titles to Cargill Holdings.
Option 2- ( 2.1) Cargill offers to take up all the existing liabilities of HEC and Rs 100 million cash and ;(2.2) Gop undertakes to transfer the asset/ machinery in running condition.
When contacted, Advisor to M/s Cargill Holdings, Sabur ur-Rehman confirmed that his company's offer was Rs 100 million not Rs 250 million which was approved by the CCoP.