KARACHI, Sept 15: Nearly three and a half months after the privatization of National Refinery Limited (NRL), the Privatization Commission has finally released the proceeds of sale to stakeholders in the refinery.

The Chairman, NIT could not be reached on Thursday to enquire if the Fund was in receipt of the sum of its share in the privatization proceeds of NRL. But Mr Abid Raza, chief executive officer (CEO) of PICIC Asset Management Company confirmed to Dawn that they had received the cheque for Rs2.8 billion. The amount mainly represented payment of Rs2.44 billion for the 5 million shares held by PICIC Growth Fund (PGF) that were included in the 34 million shares sold by the Commission.

At the NRL sell-off on May 31, three parties had contested for the 51 per cent shares in the Refinery along with management control. Of those, Attock Oil Group offered the total sum of Rs16.4 billion. That worked out to be the highest offer of Rs483 per share for the NRL stock.

According to the June 30, 2004 Annual Report, five state-owned enterprises held 54.3 per cent of the total 66.6 million outstanding shares in the Refinery; NIT had 30.5 per cent and about the same number of shares were held by “other private shareholders”. Those were said to represent individuals, institutions and Funds, such as PGF and Abamco Ltd.

The CEO of PICIC Asset Management Company said that they had already invested substantial sum of proceeds in the capital market in anticipation of its receipt from the PC. The remaining amount, he said, would be invested in equities, as and when opportunities present themselves.

But for the stakeholders, mainly Funds who had the share in privatization of NRL, the big attraction is the difference between the sale price and the market price of the NRL stock. As an example, according to the PICIC Asset Management Company official, the NRL stock was carried on the books of PGF at Rs316 on June 30, 2005.

After deducting about Rs20 per share as cost, the stock would be valued at the Privatization sale price of Rs465 per share. That would increase the value on the books by Rs149 per share and total worth of the Fund’s 158 million outstanding shares by Rs745 million. Effectively, that would translate into increase of Rs4.72 per share in the Net Asset Value (NAV) of the PGF stock.

The market had been awaiting the news of release of privatization sale proceeds by the Commission for the impact that it would have on the cash flow of Funds who have a claim on the stake sold. Other individuals and Funds, such as NIT and Abamco Limited would also benefit in a similar manner in regard to improved cash flows as well as increase in the NAV of their stocks/units.