September 24, 2002	Tuesday	Rajab 16, 1423

ISLAMABAD, Sept 23: The Cabinet Committee on Privatization (CCoP) on Monday approved the bids received for Thatta Cement Company Limited, 28 per cent equity stake in Bank Alfalah and Investment Corporation of Pakistan (ICP) Mutual Fund-Lot-A.

The CCoP, presided over by Minister for Finance Shaukat Aziz, was told that total proceeds for sale of Thatta Cement will be Rs718 million.

In addition the new buyer would pick up debt liability of Rs.383 million. Provision for Golden Handshake for the workers to the tune of Rs109 million has been made out of which the new buyer will be liable to pay Rs54.5 million. Iqbal Ali Mohammad & Consortium gave the highest offer in an open bidding on September 7, 2002.

The highest bid of Rs27.56 per share against the floor price of Rs26.56 per share for the remaining 28 per cent shares (21 million) offered by Abu Dhabi Group (UAE) was also approved. They had acquired Bank Alfalah (former Habib Credit & Exchange Bank) in 1997 through an open bidding. Remaining 2 per cent shares are reserved for employees and in case they do not take up, the new buyer would have to pick up the remaining shares. Total sale proceeds for this transaction are Rs.620.1 million. The highest bid for the management rights of Investment Corporation of Pakistan’s Lot-A Mutual Funds offered by ABAMCO Limited of Rs.175 million was also approved.

The meeting also approved the inclusion of Kohi Noor Oil Mill in the privatization programme and the divestment of GOP’s remaining shares of Pakistan Oilfields (POL) and Attock Refinery Limited (ARL) through stock exchanges. The meeting noted with satisfaction the confidence shown by the investors in the investment climate in Pakistan. Acquisition of UBL by a consortium of overseas Pakistani group in partnership with Middle Eastern investors will send a strong signal to other overseas Pakistani groups to look at investment opportunities in Pakistan.

This is the largest investment by any overseas Pakistani in the country. Moreover, such large investment just before the October 2002 elections demonstrates the investors confidence in continuation of policy of privatization in Pakistan.

Similarly investment by local investors in Thatta Cement is evidence of revival of investor’s confidence in the country’s economic situation and improving law and order situation. Disinvestment of Lot-A of ICP Mutual Funds and transfer of management rights to a quality investor is a cornerstone transaction and will open opportunities for the transfer of NITL and other ICP Funds. The Cabinet Committee noted with great satisfaction that the recently concluded privatization transaction of UBL, ICP Lot-A, remaining GOP shares in Bank Alfalah, Thatta Cement open a new era of local and foreign investments not only through acquisition of state assets but also for setting up fresh projects.

The meeting was informed about the offer for sale of 5 per cent additional shares of National Bank of Pakistan (NBP) with a green shoe option of another 5 per cent in case of over subscription at Rs21 per share.

A road show for shares offer for sale has been planned at Karachi Stock Exchange on September 24, 2002. The committee also appreciated the Annual Report prepared by the PC and commended the work done for its finalization.

The committee observed that this and such future reports would make the job work of the Privatization Commission more transparent and open up a debate, which can help Privatization Commission in improving its operations. While reviewing the final report, the Cabinet Committee noted that the pace of privatization since the present government took over in October 1999 had picked up despite the setback of 9/11. Privatisation Commission was able to raise Rs35 billion since October 1999 todate compared to Rs59.5 billion raised from November 1991 to October 1999. From 1996-1999 only Rs2.35 billion were raised and when the present government took over, the pipeline was empty.

The process of privatization was started afresh and has picked up momentum despite various shocks to the economy. The cabinet Committee noted that several other transactions are in the offing like OGDCL, PSO, PTCL and KESC, which are in advanced stage and coming to maturity in the period October 2002-January 2003.