ISLAMABAD, Oct 6: Five major international companies including from Saudi Arabia, United Arab Emirates (UAE) and Russia have shown their active interest to buy up to 74 per cent shares of the Pakistan Steel Mills Corporation (PSMC) and take over its management control.

Official sources told Dawn here on Thursday that the Privatization Commission had so far received nine Expressions of Interest (EoIs), out of which five were by those large international companies which expressed their willingness to immediately take over the control of Pakistan Steel.

The last date for submitting EoIs was October 9 and according to the sources the PC was expecting more EoIs during the next few days.

The sources said that urgent repair work was currently being carried out in Pakistan Steel to privatize it on Dec 31, 2005.

The financial adviser for this transaction — Citigroup Global Markets Limited of UK along with a consortium of technical, legal and accounting/tax/HR advisers comprising respectively Corous Consulting Limited, Dignam & Co and A.F. Ferguson & Co. — has been directed to urgently complete all the formalities so that Pakistan Steel could be disinvested well in time.

The sources said that increased interest had been shown in the privatization by the foreign companies after Japan Credit Rating Agency rated the PSMC as “A-Plus” for short-term and “A” for long-term. “Such a rating was only given earlier to a Koba-based steel mills”, a source said.

The government was expecting that a new strategic investor would inject $700-$800 million during the next four years to increase the capacity of the steel mill from 1.1 million tons to 3 million tons.

The PSMC management, the sources said, wanted to start the revamping of the mills because of having $200 million liquidity but the Privatization Commission did not accept the idea. “The PC authorities in fact stopped the management to revamp it as it is being privatized by December this year”, the sources said.

They also said that of the total 19,000 acres attached to the PSMC, 5,000 acres would be retained by the government while the rest would go for the bidding along with the mills. The 150-mw power generation plant would also be handed over to the future buyer.

When contacted Pakistan Steel chairman Lt. Gen. (Retd) Abdul Qayyum confirmed that some special interests had been shown by international companies including from Middle East and Russia to buy the mills.

“But the PS needs overhaul as its main plant is 20 year-old and has been neglected in the past”, he said adding that he had requested the Privatization Commission to accelerate the sell-off process to complete the transaction on schedule.

He said that keeping in view the vulnerability of mills, its management upgraded some of its plants including blast furnaces, cold re-rolling mills and hot strip mills. “And the remaining repair work is being done so that the future buyer could easily increase its production from 1.1 million tons to 1.5 million tons annually”, he said.

The new buyer, he said, could get the plant fully automated by spending some good money which will produce high quality steel including the one used for manufacturing of cars.

He said that the Coke Oven Battery had also been repaired by the mills itself without seeking any local or foreign assistance. The new battery, if imported, could have cost $35-$40 million, he added.