ISLAMABAD: The Privatisation Commission on Friday asked the China Investment Bank (CIB), the financial advisers on the sell-off of Pakistan Steel Mills (PSM), to develop a plan for the settlement of the liabilities of the mill.

Privatisation Minister Daniyal Aziz held a meeting with the CIB representatives and discussed proposed key components of the mill’s liability settlement plan.

Mr Aziz recommended that the plan should be supported by an effective cash flow model. The financial advisers agreed to review the additional payment and financial options.

The meeting was one of the series of meetings held over the past two weeks to proceed with PSM transaction. It was decided to extend the financial advisory services agreement.

The minister asked the financial advisers to update all data on the mill and prepare the liability settlement plan on a priority basis. He also asked them to prepare a five- to seven-year revenue plan as part of the transaction structure to ensure the financial viability of the PSM.

Mr Aziz further asked the financial advisers to settle their outstanding payments with the Privatisation Commission and to move ahead with the transactional work and complete the task within next four months.

The Privatisation Commission Board has already approved a 30-year transaction structure proposed by the financial advisers. This includes a tripartite concession agreement between the government, PSM and the investor for a period of 30 years on the basis of revenue sharing.

According to the structure plan, the land of steel mills will remain with the government while the plant and machinery will be leased, invested and then transferred back to the government for a maximum period of 30 years, while the assets of steel mill will be sold out.

Published in Dawn, January 20th, 2018