ISLAMABAD, Sept 15: The Privatization Commission on Thursday got highest bid of Rs3.205 billion for 85.5 per cent shares of Mustehkum Cement Limited at a rate of Rs305 per share from Bestway Cement of Sir Anwar Pervez but failed to attract a reasonable offer for the Bolan Textile Mill’s scrap.
Privatization Minister Dr Abdul Hafeez Sheikh said after the meeting that the Privatization Commission would recommend to the cabinet committee on privatization to accept the Bestway Cement’s bid for Mustekhum Cement as it was above the minimum acceptable price set by the commission.
He, however, said the commission would not recommend the sale of Bolan Textile Mills because its highest bid price of Rs110 million from Sadaf enterprises was much lower than the minimum acceptable price of Rs147.105 million set by the Privatization Commission.
A total of three companies participated in the bidding for Mustehkum Cement, a plant having no production at the moment but carried total liabilities of Rs1.239 billion to be taken over by the government.
In the first round of bidding, sealed bids were invited. Bestway Cement Group offered a bid price of Rs185 per share, followed by Maple Leaf Cement Rs125 per share and Three-Star Group offered a bid price of Rs85 per share.
In the second round, the bidders were asked to increase their bid and it was again the Bestway Cement that offered the highest bid of Rs305 per share or Rs3.205 billion to acquire 85.5 per cent of Mustehkum Cement Limited. The second highest bidder refused to go beyond its bid of Rs300 per share and hence the minister announced that Bestway Cement was a successful bidder.
He said a meeting of the Cabinet Committee on Privatization would meet shortly to approve the bidding. The managing director of Bestway Cement Zamir Chaudhry said his company had lined up all the financial arrangement and would pay the bid money as soon as the government issued them letter of acceptance.
In case of Bolan Textile Limited, a total of 12 parties participated in the bidding. The land and a portion of mill’s machinery has been donated by the government to set up Bolan Engineering University while the bidding was held only for the scrap.
The bidders were asked to submit sealed bids, which were opened on the spot. Three companies offering highest bids were asked to improve their offers through open bidding. The three companies included Sadaf Enterprizes with an offer of Rs72.5 million, followed by SAF Group with a bid of Rs70.7 million and Nawaz Khan Trading Company offered a bid of Rs69.6 million.
The bidders were told that their bids were much lower than the minimum acceptable price set by the government and hence they should improve their bids.
In the second round, Sadaf Enterprises offered a highest bid of Rs100.6 million. At this the privatization minister said the highest bid was not acceptable. He offered the highest bidder to match the minimum acceptable price of Rs147.1 million price approved by the government; otherwise he would not accept the bid.
On refusal from the highest bidder, the second highest bidder SAF Group that had offered a bid price of Rs105 million was also given an opportunity to match the floor price and then third bidder but none of them was ready.
At this, the minister asked the highest bidder to offer his final bid so that Cabinet Committee on Privatization could be informed about the final offer. At this, Sadaf Enterprise offered to meet a highest bid of Rs110 million.
The minister said that since the highest offer was much lower than the floor price he would not recommend to the CCoP to sell Bolan Textile to the highest bidder.
He said the government wanted to fetch best price for national assets and could not give it to investors at throwaway prices. He said the next transactions during the current year would be of Karachi Shipyard, Pakistan Petroleum Limited, Pakistan Steel and State Engineering Corporation.
Responding to a question, he said announcement with regard to KESC privatization was expected within three-four days.
He declined to comment on the sale process of Pakistan Telecommunication Limited and said in big transactions like PTCL there were always some last minute settlements.
