0.2m ordinary people benefit from sell-off: First PPL road show
By Our Reporter
ISLAMABAD, July 7: Privatization and Investment Minister Dr Abdul Hafeez Shaikh said here Wednesday that the current privatization policy aimed at facilitating middle class participation in investment.
While speaking at the first roadshow of Pakistan Petroleum Limited shares, the minister said nearly 200,000 ordinary people had already benefited from the sale of shares of OGDCL and SSGC.
Dr Hafeez was confident that such people would take advantage of the initial public offering (IPO) of PPL comprising 68.6 million shares. In case of over subscription, the government has decided to exercise the greenshoe option of additional 34.3 million shares. The subscription under the IPO will be open for four days from July 19 to 22.
The Privatization Commission has advised the general public to open their accounts with the Central Depository Company (CDC) for purchase of shares through it. But if they opt for physical possession of shares, they may not be able to sell these promptly to derive full benefit from a possible increase in their price in the stock market because of delay in their delivery.
In his presentation on the financial performance of PPL, managing director Syed Munsif Raza said that its revenues had multiplied nearly four-fold from Rs4,100 million in 2001 to an estimated Rs15,928 million in 2004.
Apparently, this achievement is attributable to the government's policy of making petroleum products ever more expensive to the detriment of the people as evident from the phenomenal increase in profits of PPL.
According to the figures provided in the roadshow, the net profit of the company jumped by 1,134 per cent from Rs459 million to Rs5,665 million during the four-year period (2001-04).
The government of Pakistan, since transfer by Burmah Oil Company of the UK of its entire equity in 1997, holds 93.4pc of its equity. As regards the rest, the International Finance Corporation (IFC), a sister-organization of the World Bank and the IMF, holds 6.1pc, while the remaining 0.5pc is held by private Pakistani shareholders.
It is envisaged to sell 51 per cent of the government's total shareholding along with transfer of management control to a strategic buyer. Owner and operator of Sui and Kandhkot gas fields, PPL accounts for about 34.4pc of total gas supplies in Pakistan.
During a question-hour session, some members of the public said that the PIA shares had been over-priced that resulted in loss to their buyers. The Privatisation Minister said when the sale of these shares took place at the rate of Rs20 each, it ranged from Rs25 to 27 each in the stock market.
Moreover, the minister observed these were national assets and it had to be ensured that these were not disposed of at throwaway prices. Earlier, the senior executives of Elixir Securities, lead manager of the IPO, presented significant features of the offer, while the chief executive of the CDC described its functioning.
According to an announcement by the Privatization Commission, the second roadshow of PPL shares will be held at Quetta on Thursday (today) at Serena Hotel. Meanwhile, according to a press release, Dr Hafeez Shaikh on Wednesday directed the Privatization Commission officials to speed the process of privatization of public sector entities in an "aggressive and transparent" manner.
While speaking to the officers and consultants, the minister said it must be ensured that the problems faced by the general public during the recent public offerings such as delay in collection of data for subscription from the banks, holding ballots, belated delivery of shares through CDC or physical transfer did not recur in the forthcoming public offerings.
The minister was informed that the process of the public offering of Kot Adu Power Company, United Bank Limited, Pakistan Steel and State Life Insurance Company shares had been initiated, while the privatization process of Carrier Telephone Industries (CTI), Islamabad, and Telephone Industries of Pakistan (Haripur) was at an advanced stage.
The pre-bid meeting for CTI will be convened in the next week to facilitate the participating parties, it was stated. The meeting also reviewed the status of the privatization process of Karachi Electric Supply Company, Peshawar Electric Supply Company, Sui Northern Gas Company, Sui Southern Gas Company, National Investment Trust, Telecom Company Ltd, 51pc strategic sale of OGDCL, PPL, National Refinery, Pakistan State Oil, 90pc strategic sale of Pak Arab Fertilizers, Pak American Fertilizers and other transactions.
