ISLAMABAD, Nov 13: Pakistan on Monday announced to offer for sale up to 15 per cent shares of Oil and Gas Development Company Limited (OGDCL) to the international investors through global depository shares (GDSs) and secondary public offering to domestic investors simultaneously from Wednesday.
“The book-building process will open on November 15 and close on November 30 in the London Stock Exchange as well as in the three domestic stock exchanges,” Minister for privatisation and Investment Zahid Hamid said at a news conference.
The price of the GDS and domestic shares will be determined by the market interest on December 1 and unconditional and normal trading at London Stock Exchange was likely to start on December 6, 2006, he said.
Pakistan is expected to get more than Rs88 billion ($1.47) through the sale - the country’s largest ever equity offering - of about 645.139 million shares at current trading price of Rs135 per share.
A maximum of 32.3 million shares are reserved for the general public at home through retail offering while the international and domestic institutional investors would compete - both for share price and size of the shareholding - to control remaining 613 million shares of the company.A total of 645.139 million (15 per cent) shares of OGDCL are for sale. The offer consists an international offering of up to 532.939 million shares in the form of ordinary shares to institutional investors in Pakistan and GDSs to international investors including qualified institutional buyers in the United States and up to 32.3 million ordinary shares to domestic investors. This will also include an option of over-allotment for GDSs up to 79.900 million additional shares.
He said the OGDCL management would hold marketing shows in Hong Kong, Singapore, Middle East and London from November 15. Mr Hamid said GDSs would be listed at London Stock Exchange with each GDS representing 10 underlying ordinary shares. The ordinary shares will be listed at Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange.
The price for the shares and GDSs offered in the institutional offering will be fixed following a book keeping process on or around November 30, with the price and allocations for shares and GDSs announced on or around December 1.
The minister said that GDSs offer would represent Pakistan’s domestic institutional investors for the first time in an international book keeping.
BMA Capital, Citigroup and Goldman Sachs are joint lead managers with Citigroup and Goldman Sachs acting as joint global co-ordinator and book-runners for the international offering and BMA Capital as lead manager and book-runner for the domestic offering and joint lead manager of the international offering.
The minister termed GDSs offering as market driven saying the market forces will determine the value of GDSs and its size.
He said the GDSs would get good response from the investors. He referred to the country’s road-shows held sometime back which he claimed were a great success and now OGDC management was leaving for different destinations to arrange company road-shows to give the international investors an idea of the organisational strength.
Zahid Hamid said the GDSs were the largest ever equity offering of any Pakistani company abroad that would be a great step forward of the ongoing privatisation programme. He said the offering will help raise more awareness among the international investment community of the exciting investment opportunities in Pakistan.
He observed that the offering would also broaden OGDC investor base, enhance its international profile and expedite its transition into a truly world-class, publicly-listed commercial enterprise.
The minister told a questioner that the process for Pakistan Steel Mills’ strategic sell-off and initial public offering (IPO) was under progress. He claimed that privatisation programme was highly transparent and its credibility was not questioned by the Supreme Court of Pakistan in PSM case.
OGDC chairman and managing director Arshad Nasar said that the announcement for GDSs offering was highly significant in OGDC’s history. He said GDSs offer would allow the company build a diversified, high-quality investor base as it always strives to achieve operational excellence and world class standards of corporate practices.
He said as a leading exploration and production company in Pakistan, OGDC’s objective was to enhance our production and reserve profile that would ultimately maximise value for its shareholders. "OGDC management looks forward to welcoming our new shareholders as we embark on our next phase of growth".
OGDCL holds the largest portfolio of the recoverable hydrocarbon reserves in Pakistan, 32 per cent gas and 37 per cent oil respectively as on June 30 this year and it contributed 22 per cent of the country’s total gas production and 48 per cent of oil production, he said.
He added that with a portfolio of 46 exploration licences, OGDC has the largest exploration acreage in Pakistan, covering 39 per cent of total awarded area and now it is focusing on onshore exploration.
The largest petroleum exploration and production company had a net profit of Rs45.8 billion for the year ended on June 30, 2006 and Rs12. billion for the fist three months of the current fiscal year.
