The PSX Divestment Committee has announced that bids for divestment of 40 percent equity stake of Pakistan Stock Exchange would be received till 4pm on December 22, 2016 and will be opened at 5pm the same day. On Thursday, the Divestment Committee called a meeting and asked all the interested bidders to formally submit their bids. Being a strategic investor, Markhor, a consortium comprising NASDWX, DCE Capital, Kingsway Capital, Blibros Capital, MCB and FABL submitted the bid to acquire 40 percent PSX stake allocated for strategic investors.
National Bank of Pakistan and Habib Metropolitan Bank submitted their separate bids to acquire 5 percent stake each as under the law any single local institution is not allowed to acquire more than 5 percent shares of PSX. The second strategic investor was a Chinese Consortium comprising Shanghai and Shenzhen Stock Exchanges with one Chinese Fund and Habib Bank Limited. The representatives of the Chinese Consortium were on the way from Beijing to participate in the bidding process, however their flight got delayed and they accordingly informed Pakistan Stock Exchange about the happening. To facilitate them, the PSX Divestment Committee extended the time for submission of bids till 9pm.
The Chinese delegation arrived at PSX at 8pm and started discussion with the Divestment Committee and sought clarifications over various procedural, regulatory and management matters. In the meantime, the Chairman of Securities and Exchange Commission of Pakistan (SECP) Zafar Hijazi also arrived at PSX to facilitate the investors and give necessary approvals if required during the bidding process.
The meeting continued till late midnight and the PSX Divestment Committee finally decided to extend bid submission date for another five to six days to enable all the interested bidders to participate in the bidding process. Later, PSX issued a press release on Friday saying that the Divestment Committee of Pakistan Stock Exchange Limited has started receiving bids for the sale of 40 percent equity stake of PSX from 4pm, December 15, 2016 onwards. The bids will be received till 4pm on December 22, 2016 and opened at 5pm the same day. The bids will be opened in the presence of authorised representatives of the respective bidders, in line with the prescribed procedures.
Divestment Committee Chairman Shahzad Chamdia told Business Recorder that representatives of Chinese delegation were seeking some clarifications over various procedural and management matters and now they were satisfied and ready to participate in the bidding process. Now, the Chinese Consortium is waiting for approval from their regulator. The Chinese Consortium is expected to submit bid in next three to four days.
He said the PSX Divestment Committee is making hectic efforts for timely completion of the divestment process of 40 percent equity stake of Pakistan Stock Exchange to strategic investors. State Life Insurance Corporation of Pakistan was also willing to participate in the bidding process to acquire 5 percent shares of PSX, however it was required to get government approval. The SLICP can also submit its bid if the government approval is received in next few days.
After opening of bids, a letter of acceptance would be issued to the successful bidder and then a formal sale-purchase agreement would be signed between the parties. The deadline for completion of this bidding process and sale of 40 percent stake of PSX to strategic investors is December 27, 2016. As per Demutualization process, the remaining 20 percent shares would be offered to general public through initial public offering (IPO) within 6 months after completion of the bidding process.