LAHORE, Jan 11: Prime Minister Shaukat Aziz has asked the management of the Corporate and Industrial Restructuring Corporation (CIRC) to explore the possibility of +ACI-privatizing + ACI- the corporation and its operations for converting it into a Special Purpose Vehicle (SPV) after the completion of its six-year life span in September 2006.

The private investor would be required under the proposal to purchase all residual, +ACI-distressed +ACI- non performing accounts (NPAs) from the present CIRC owner - the federal government - and rehabilitate and revive the units and/or operate or sell them.

+ACI-If we succeed in bringing some private investor, whether local or foreign, into the CIRC by September 2006, it will help the government dispose of left-over units and accounts immediately, deregulate the CIRC operations, and encourage both private and foreign banks to hand over their NPAs to the corporation for quick disposal, +ACI- CIRC Member (Banking) Naeemuddin Khan told Dawn on Tuesday.

He said the prime minister had asked the CIRC management to explore the possibility of privatization of the corporation at its board meeting held last week in Islamabad.

Another option, he said, being considered is to transfer all the residual accounts to some state-owned bank and wind up the corporation in September 2006 as required under the sunset clause in its law.

The CIRC was formed by the government in September 2000 to clean up the balance sheets of the six state-owned banks and development finance institutions (DFIs) in order to pave the way for their privatization.

They include Habib Bank, United Bank, National Development Finance Corporation (NDFC), Industrial Development Bank of Pakistan (IDBP), Agricultural Development Bank of Pakistan (ADBP) and National Bank.

+ACI-We have cleaned up the balance sheets of all the banks and most of them have already been privatized, +ACI- Mr Khan said. +ACI-It is a big achievement for us.+ACI-

Since its inception, the CIRC was referred 779 NPAs involving an outstanding amount of Rs141.958 billion. However, the CIRC acquired only 257 units involving an outstanding amount of Rs49.877 billion at a price of Rs5.990 billion. Out of the NPAs acquired by the CIRC, some 77 had no assets at all.

+ACI-It meant that we acquired 180 NPAs involving an outstanding amount of Rs21.670 billion, +ACI- Mr Khan said. He said the CIRC had so far sold off 126 units involving an outstanding default amount of about Rs14 billion for around Rs5bn. +ACI-We have made a profit of nearly Rs700 million in the settlement of these NPAs, +ACI- he added.

Mr Khan said the CIRC had also acted an intermediary between the banks and defaulters and helped resolved some 249 NPAs involving an outstanding amount of Rs45.575 billion in addition to auctioning the assets of units acquired by it.