ISLAMABAD: The Privatisation Commission unveiled on Tuesday a plan under which a company would be set up to run the Pakistan Steel Mills (PSM) for up to 30 years on the basis of sharing of revenue.
The proposed transaction structure and a tripartite concession agreement are expected to be approved by the Cabinet Committee on Privatisation on Friday, to be chaired by Finance Minister Ishaq Dar.
According to a decision taken by the commission’s board, the entire land of the country’s largest industrial complex would remain with the government while its plants and machinery would be handed over to the new company for a maximum of 30 years. The board decided that no asset of the PSM would be sold.
The financial advisers appointed for suggesting ways to restructure the PSM proposed the establishment of the new company, the commission said.
Privatisation Commission’s board decides that PSM assets will not be sold
The board of the Privatisation Commission also approved the transaction structure of the SME Bank, which included sale of 93.88 per cent shareholding of the government.
Based on the proposed structure, the State Bank of Pakistan (SBP) would allow a reduced Minimum Capital Requirement of Rs6 billion on staggered basis for five years, with Rs2bn upfront and Rs1bn each for the next four years.
The SBP would also issue a new banking licence of a specialised nature with at least 60 per cent advances for the SME sector to the investor while also allowing the Capital Adequacy Ratio of 10 per cent for five years after privatisation.
Following a request by the information ministry, the board agreed to delist the Shalimar Recording and Broadcasting Company from the privatisation programme.
It agreed to constitute a committee to evaluate the viability of delisting the Sindh Engineering Limited (SEL), as requested by the industries ministry. The committee would assess the legal status of the SEL assets and provide a comparative analysis in case of privatisation and restructuring or delisting of the entity.
The board also approved the initiation of a process for hiring of financial advisers for the Pakistan Re-Insurance Company, National Insurance Company and Heavy Electrical Complex (HEC).
Unsuccessful attempts were made in 2006, 2011 and 2013 to privatise the HEC.
Published in Dawn, January 18th, 2017