ISLAMABAD, July 24: The Cabinet Committee on Privatization (CCoP) on Saturday approved the restructuring and sale of additional shares of Allied Bank Limited (ABL).

The meeting, which was chaired by Finance Minister Shaukat Aziz, accepted the highest bid of Rs14.2 billion offered by the consortium of Ibrahim Leasing Limited and Associates for acquiring 325 million additional shares in the bank, which constitute 75.35 per cent of the revised capital.

The meeting noted that the transaction was solely for the sake of reconstruction of its capital base and the amount so generated would be injected in the bank to raise its capital.

According to a press release after the injection of this capital, the capital adequacy ratio (CAR) of the bank would increase to allow it to expand its activities.

The meeting also expressed its satisfaction over the highly transparent manner in which the transaction was carried out by the State Bank of Pakistan.

The finance minister directed the SBP to ensure that the remaining part of the transaction was also done in a transparent manner.

The minister said it was a good sign that additional shares of ABL had been acquired by a reputed local business group of the country, which was a reflection of the investor's confidence in Pakistan and would ensure that dividends from ABL would be retained in Pakistan. The decision would be submitted for information to the next ECC meeting.

The CCoP also allowed sale of 10 per cent shares retained for employees of privatized units and reviewed the preliminary results of PPL transaction.

The committee also approved the preliminary transaction structure for the privatization of Pakistan Petroleum Limited (PPL).

The meeting was briefed about the overwhelming response by the small investors to the recent IPO of PPL. The finance minister noted with satisfaction that the offering had been oversubscribed according to interim information received from the banks and the benefit would be passed on to a large number of small investors.

Mr Shaukat observed that the PPL IPO would also significantly add to the market capitalization, broaden and further strengthen the base of the stock market. The sale of 10 per cent shares of privatized units retained for employees to benefit approximately 1500 workers. The units include Kohat Cement, Dandot Cement, Ghribwal Cement and Ittehad Chemicals.

The shares would be offered at 50 per cent discount to the prevailing market price to those employees of these privatized units who had no accepted the VSS/GHS schemes.

The CCoP also reviewed theprogress of the privatization process of various public sector entities and gave necessary instructions to accelerate the pace of privatization process.

The CCOP constituted a committee under the chairmanship of Federal Minister for Privatization and Investment Dr Abdul Hafeez Shaikh to review the issue raised by the prospective bidders for FESCO and other power sector entities and provide maximum comfort to complete these transactions.

Federal Ministers and senior officials of Finance, Information Technology and Telecommunications, Petroleum and Natural Resources, Privatization and Investment,Labour Manpower and Overseas Pakistanis, Water and Power, Industries and Production, Defence, Culture and Tourism, Securities Exchange Commission of Pakistan and PC attended the meeting.