ISLAMABAD, March 9: Fauji Fertilizer Company Limited gave here on Thursday the highest bid to buy Pak Saudi Fertilizer Limited (PSFL), which was latter accepted by the Privatization Commission Board.

Now the Cabinet Committee on Privatization (CCoP) will meet on Monday to finally approve the mega transaction that took place for the first time since the present government came to power on October 12, 1999.

Print and electronic media were present when sealed bids of three parties were opened. A large number of businessmen and investors also witnessed the ceremony.

Fauji Fertilizer Company offered Rs135.85 per share totalling roughly Rs7.3 billion, followed by Dawood Hercules Chemicals Limited, Rs3.78 billion (Rs70 per share) and Engro Chemical Pakistan Limited, Rs3.602 billion (Rs66.71 per share).

The new buyer of PSFL will acquire 90 per cent shares (54 million) while 10 per cent shares will be extended to the general public.

According to the informed sources, the PC Board decided to accept the Fauji Fertilizer’s bid because it was close to reference price earlier kept by the CCoP. The reference price approved by CCoP was Rs147 per share.

During the PC Board meeting, the Minister for Privatization Altaf M. Saleem said that Fauji’s offer was good, which should not be rejected as it will give a big boost to the privatization process. The other members of the Board also felt that it was a good price and should be accepted without any delay.

Earlier, he said that it was a big breakthrough and it will attract investors for other public sector units.

He said foreign investors were reluctant because domestic investors were not interested in the privatization process of Pakistan. “But now I am sure foreign investors will certainly be wishing to also take part in our privatization programme which is open, fair and transparent in all respects,” Altaf M. Saleem said.

Now, he pointed out, other fertilizer units will be privatized, which included Hazara Phosphate Fertilizer (Pvt) Limited, Layallpur Chemicals & Fertilizer Limited, Pak Arab Fertilizers Limited and Pak American Fertilizers Limited.

The representatives of all three competitors termed the PSFL deal as fair and transparent.

The representative of Dawood Hercules said that he did not think that there was any need to further improve the bid and that Fauji Fertilizer deserved to be acquiring majority shares as it had offered a good price. “The process is totally transparent and I appreciate the role of the Privatization Commission in this behalf,” he said.

The representative of Engro Chemical said that a very good opportunity was provided by the PC for due diligence and he was fully satisfied with the process adopted for disinvesting Saudi Pak Fertilizer. “We could not strike the deal but no regrets as every thing was transparent,” he added.

Managing Director of Fauji Fertilizer Lt-Gen (Retd) Ahmad Shoaib said that the process was highly transparent, and that the PSFL was a national asset which should have received a reasonable price.

PSFL produces nitrogenous fertilizer that is called urea. The urea plant is combination of various parts that were imported from Italy, Germany, Holland and Japan, and is capable of producing 1740 tons of urea per day. The annual capacity of the urea plant, based on 320 days production is 5,57,000 tons. Urea is a chemical combination of ammonia and carbon dioxide. The chemical process is called Snamprogretti process.