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PC to appoint consortium for selling govt stake in Mari Petroleum

Updated December 03, 2017

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A view of the Aqeeq-1 hydrocarbon well site in Sujawal Block, Sindh, operated by Mari Petroleum.—File photo
A view of the Aqeeq-1 hydrocarbon well site in Sujawal Block, Sindh, operated by Mari Petroleum.—File photo

ISLAMABAD: The Privatisation Commission has once again announced its intention to appoint a financial advisory consortium for the divestment of government-held shares in Mari Petroleum Company Ltd.

The last such announcement was made on Sept 1, with a deadline of Sept 25. But no further action was seen then, even though some parties had submitted bids for the process.

This time, the last date for the submission of technical and financial proposals is Jan 2, 2018.

The government intends to divest up to 18.39 per cent of its shareholding in Mari Petroleum to foreign and domestic institutional investors, high net worth individuals and the general public through a secondary public offering on the Pakistan Stock Exchange.

Mari Petroleum is a fully integrated exploration and production company, currently managing and operating the country’s largest gas reservoir at the Mari field in Ghotki, Sindh.

Fauji Foundation holds a 40pc shareholding in the company along with management rights while the government, Oil and Gas Development Company and the general public hold 18.39pc, 20pc and 21.61pc of shareholding, respectively. It is a listed company and its shares are quoted on the stock exchange.

The Privatisation Commission has invited technical and financial proposals from interested parties comprising not more than three members, including a global coordinator, a consultant to the issue and a book-runner, to act as the financial advisory consortium for the transaction.

Other than Mari Petroleum, the board has also decided to initiate the privatisation process of SME Bank and Heavy Electrical Complex following a decision a few months ago to revive the stalled privatisation programme.

Pakistan International Airlines (PIA) has been debated extensively for privatisation as well. The commission’s board decided in its last meeting that the planned move has been complicated by the recent legislation that has barred the transfer of 51pc government shares and management control to investors.

The board meeting, chaired by Minister for Privatisation Daniyal Aziz, was also informed about the volume and nature of losses being accrued in power generation and distribution companies. The volume of circular debt has already reached Rs450 billion and is likely to rise further, making it all the more important to improve the efficiency of the power generation and distribution companies.

After detailed deliberations, it was decided that the Privatisation Commission would seek government approval to privatise Northern Power Generation Company Ltd, Faisalabad Electric Supply Company Ltd and Islamabad Electric Supply Company Ltd as strategic sale.

Published in Dawn, December 3rd, 2017