Steel Mills transaction structure for privatisation approved

Published December 11, 2020
IN this Feb 7, 2016 photo, a man walks past machines at the hot strip mill department of the PSM. Curtailment of natural gas supply led to closure of the country’s largest industrial unit in June 2015..—Reuters
IN this Feb 7, 2016 photo, a man walks past machines at the hot strip mill department of the PSM. Curtailment of natural gas supply led to closure of the country’s largest industrial unit in June 2015..—Reuters

ISLAMABAD: The Privatisation Commission (PC) on Thursday approved transaction structure for the privatisation of the Pakistan Steel Mills (PSM) and decided to present it to the Cabinet Committee on Privatisation (CCoP) for approval.

The meeting discussed the PSM’s privatisation structure in a holistic manner and was chaired by Privatisation Minister Mohammadmian Soomro.

The meeting was also attended by industries minister, board of investment chairman, privatisation and finance secretaries, financial advisers, adviser to PM on institutional reforms and special assistants to prime minister.

Earlier, the Islamabad High Court had ruled that advisers and special assistants cannot head government’s committees. Subsequently, the government will now re-constitute the CCoP to include elected representatives as members of the committee as well as its chairman.

An elected representative will likely replace Abdul Hafeez Shaikh as chairman since Mr Shaikh currently holds the portfolio as an adviser.

Under the transaction structure approved by the PC, majority of the shares of the PSM will be divested. Modalities in this connection will be decided once the structure is approved by the CCoP, official sources told Dawn.

Meanwhile, it was agreed that a new company will be floated which will hold 1,200 acres of land of the PSM. Currently, the PSM spreads on 18,600 acres of land. The remaining land will be held by the state.

In September this year, the PC board had approved the transaction structure for the revival of the PSM which has not been operational since June 2015.

On Nov 28, the government laid off over 4,500 PSM employees following an emergency meeting chai­red by the mill’s chief executive officer (CEO) at the CEO Secretariat.

The PSM was one of the premier state-owned enterprises which started commercial operations in the early eighties and played a pivotal role in the country’s economy when it became fully operational.

The transaction structure was agreed in principle and financial adviser was asked to move ahead with procedural follow up processes expeditiously. The PC after conducting due process appointed Pak China Investment Company and BOC International as joint lead financial advisers.

As per the available information, the financial adviser has proposed options including sale of majority shares to the newly-formed company or transferring identified core operating assets to private sector strategic partner by entering into lease agreement for a longer period.

Published in Dawn, December 11th, 2020

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Unchanged rating
Updated 29 Feb, 2024

Unchanged rating

Unchanged Moody's rating underscores that fears of default will continue unless a new, larger loan agreement is reached with the IMF.
Silenced voices
29 Feb, 2024

Silenced voices

THE state suddenly seems to be acting more loyal than the king as far as respect for the judiciary is concerned. The...
Gwadar deluge
29 Feb, 2024

Gwadar deluge

GWADAR has been battered with severe rains — the worst since 2010 — with both the town and Ormara to its east ...
Democracy damaged
Updated 28 Feb, 2024

Democracy damaged

The reserved seats controversy could have been avoided had the ECP by now decided whether SIC deserves them or not.
Misplaced priorities
28 Feb, 2024

Misplaced priorities

THE federal government’s filing of a petition with the Supreme Court on Monday, seeking to overturn an Islamabad...
Killing jirgas
28 Feb, 2024

Killing jirgas

ANOTHER day and another chilling story unfolds in Kohistan. The jirga institution, declared illegal by the top ...