October 23, 2002	Wednesday	Sha’aban 16,1423

ISLAMABAD, Oct 22: The Privatization Commission has finalized a financial advisory services agreement with Merrill Lynch for disinvestment of Pakistan Petroleum Limited (PPL).

According to the Privatization Commission, Merrill Lynch was the top ranked firm amongst the five firms participated in the bidding process for the financial advisory services contract. An agreement will be executed shortly in this regard.

The PPL privatization is part of the process of restructuring and reform of the oil & gas sector and included in the privatization programme approved by the cabinet.

The Privatization Commission is proceeding with the privatization of PPL after the government decided to rationalize gas prices and PPL’s wellhead gas price agreement of 1982 was replaced with a new agreement.

It is planned to disinvest 51 per cent shares of PPL with a 12-month schedule to a strategic investor who will acquire management control. In order to encourage full government commitment to the privatization before disbursing funds to the financial adviser, the contract would only become effective after the transaction structure is approved.

The financial adviser will carry out preliminary work on the range of options for a transaction structure that is suitable for PPL and is in the national interest.

The financial adviser will also study the concept of disinvesting 5 per cent shares of PPL on stock exchange to the small investors with a view to increasing the ownership base and deepening the capital market.