KARACHI, May 24: The Privatisation Commission will unlock ‘data room’ for NIT’s qualified bidders to conduct due diligence following its meeting on Thursday.
The Privatisation Commission Board meeting to be held on Thursday will be the first in business after new Privatisation and Investment Minister Zahid Hamid took office on April 26.
The meeting will review several upcoming transactions, foremost among them being that of NIT. The government intends to privatise NIT -– the largest mutual fund in Pakistan, with Rs85 billion under management -— along with management rights by dividing it into six parts: three to be put up for auction and the other three to be distributed to three banks — National Bank of Pakistan, Faysal Bank and Bank of Punjab — that hold the letters of comfort (LoCs).
A source at the Privatisation Commission said on Wednesday that 19 parties, which included four major stock brokerages and at least 10 banks and financial institutions, had submitted letters of qualifications (LoQs). Out of them, 17 are expected to be qualified and will be given access to the NIT data room for the conduct of due diligence.
An executive at NIT confirmed that the ‘data room’ was in a state of readiness. Due diligence will be followed by ‘pre-bid meetings’ which will lead to the date of auction.
Although Prime Minister Shaukat Aziz last week identified several mega transactions that should go on the auction block before the end of the current fiscal year, the government could not dither particularly in respect of NIT because the date of redemption of first LoC falls as close as next month (June).
The source at the Privatisation Commission observed that in Thursday’s meeting, the commission could go further to announce the date of bidding for NIT. The urgency being that in case of delay in privatisation of NIT by June, the government will be constrained to redeem first the Faysal Bank’s LoC due in June, which will require Rs8.3 billion (157 million units held by the bank multiplied by the current price of Rs53 per unit). This will be followed by NBP to be paid Rs24.2 billion and Bank of Punjab to be paid Rs8.2 billion.
