ISLAMABAD, Feb 12: The government has decided to off-load five to 20 per cent shares of the Habib Bank Ltd with a view to giving benefits of the privatization to the general public.

“Hopefully we will be offering 10 per cent initial public offering (IPO) to earn roughly Rs1.6 billion, keeping in view Rs16 billion capital of the Habib Bank,” said Minister for Privatisation, Altaf M. Saleem.

The Privatization Commission (PC) board, which met here on Tuesday under the chairmanship of privatization minister, also took a number of other decisions to accelerate the pace of disinvestment in the country.

Talking to Dawn, Mr. Saleem, who is also chairman of the PC, said that response of disinvesting 10 per cent shares of the National Bank had been very successful that encouraged the government to also off-load shares of other nationalized commercial banks.

Responding to a question, he said the government could disinvest up to 20 per cent shares of the HBL to earn about Rs3.2 billion. “But we initially plan to concentrate on offering 10 per cent shares of the HBL,” he added.

He said the successful disinvestment of 10 per cent shares of the National Bank through stock markets had been widely appreciated both by the business community and the public at large.

He said the National Bank issue was 5.5 times oversubscribed against an issue size of 5 per cent for Rs186.5 million. There were 27,546 applications that were received for 103 million sharers amounting to Rs1.04 billion.

The board also accorded approval for disinvesting the remaining nine per cent shares in Muslim Commercial Bank.

The meeting also approved the appointment of Pricewaterhouse as Financial Adviser for Jamshoro Power Plant, subject to successful contract negotiations. The meeting was told that it was imperative to privatize the Karachi Electricity Supply Company due to its weak financial position.

It was also decided to include Karachi Shipyard and Engineering Works Ltd in the privatization programme.

The PC board also noted the status of the privatization of Pak Saudi Fertilizers Ltd. Matters pertaining to the status of disinvestment of 30 per cent shares in Bank Alfalah (former Habib Credit and Exchange Bank) were also discussed by the board.

While reviewing the implementation status of decisions taken and progress of certain transactions, the meeting was informed that by February 28, the pre-qualified parties for the United Bank would conclude their due diligence and the bidding was scheduled for end March 2002. It was further informed that Allied Bank Ltd made huge offers?” questioned one central banker.

This is the second time within a week that the State Bank guys have signalled to banks to take auctions and OMOs more seriously than ever before and come up with right amount of bids or offers.

On Wednesday last the SBP siphoned off Rs24.7 billion from the market through auction of treasury bills against the target of Rs4 billion. Reason: the banks had submitted Rs24.7 billion worth of bids without having that much liquidity. By accepting all the bids the central bank made them realize that any attempt to corner the market would not be tolerated.

Now by accepting the largest chunk of Rs21.85 billion offers on Tuesday SBP has again signalled to banks to be as realistic as possible when it comes to seeking liquidity injection from the central bank and price their offers accordingly.

PIB AUCTION: Meanwhile, the State bank has announced to hold the auction of 10-year Pakistan Investment Bonds on February 27 at the reduced coupon rate of 11 per cent.