ISLAMABAD, Aug 28: The Privatization Commission on Thursday received the highest bid of Rs255 million for the sale of Associated Cement (Rohri) from National Transport Company.

However, a very poor response came from the bidders for the sale of Thatta Cement as the highest bid of Rs6.70 per share offered by Haji Saifullah Group was far lower than the reference price of Rs9 per share.

Privatization and Investment Minister Dr Abdul Hafeez Sheikh said the highest bid was close to the reference price fixed by the Commission for the sale of Associated Cement.

He said following the formal approval by the Privatization Commission Board and the Cabinet Committee on Privatization, the highest bidder would be required to pay 50 per cent of the bid amount within seven days and the remaining 50 per cent in 30 days to take over the unit.

The Privatization Commission had offered 71.7975 million shares of Thatta Cement. At the outset, the bidders were told that floor price to open the bid would be Rs7 per share, but bidders did not agree. Four companies — Haji Saifullah Group, Al-Abbas Group, Bestway Cement and Star Corporation — participated in the bidding.

Subsequently, the floor price was suspended to start the bidding and the first offer was only Rs5.10 per share which went up to Rs6.70 per share from Haji Saifullah Group.

Privatization Commission secretary Ahmad Waqar announced that if the highest bidder did not match the reference price of Rs9 per share for Thatta Cement within three days the bidding results would be declared ‘null and void’ and fresh bids would be invited.

He said the Privatization Commission was not satisfied with the offers because the unit was profitable and offered further chances of profits in view of its proposed conversion to coal from other fuels and the takeover of its management by the private sector.

Thatta Cement is a limited company owned by State Cement Corporation and is situated at 115 km northeast of Karachi. The plant has a capacity of 1,000 tons per day. The unit is operational and owns around 236 acres of land, besides a mining lease over an area of 4,725 acres.

Associated Cement (Rohri) was offered to the bidders on ‘as-is-where-is basis’. Ten bidders —National Transport, Export International, DG Khan Cement, Bestway Cement, AA Enterprises, Jamaluddin Company, Suresh Kumar, Mezaan Ship Breaking, Al-Hamza Ship Breaking and Star Corporation—participated in the bidding.

The open bidding started from the floor price of Rs165 million and incremental calls of at least Rs2.5 million each during the auctioning. Following a tough competition among D.G. Khan Cement, Al-Hamza, Suresh Kumar and National Transport, the highest bid of Rs255 million of National Transport was accepted.

Representative of the highest bidder Syed Shoaib said the company intended to revive the unit to compete with the existing cement manufacturers for healthy economic activity.

Associated Cement has a production capacity of 270,000 tons of cement per annum, but the plant is closed at the moment. The unit owns an area of 195.3 acres of land, while it also owns another 24.45 acres of agriculture land located in the vicinity. The plant is spread over an area of 36 acres. The factory is located seven km from Sukkur and is free of all liabilities.