ISLAMABAD, Aug 23: The Asian Development Bank (ADB) has asked the government to privatise major state sector enterprises through Initial Public Offering (IPO) and by early off-loading the remaining shares of commercial banks.

Informed sources told Dawn that the Privatization Commission Board which met here on Thursday under the chairmanship of Minister for Privatization and Investment Zahid Aziz discussed various proposals to accelerate the process of privatisation in the light of ADB advice.

The meeting took into account the prevailing investment climate which was not very conducive for disinvestment of public sector entities.

President Gen Pervez Musharraf had stated in Karachi recently that due to fast developing security environment, Pakistan has started facing economic crisis and problems in attracting foreign investment.

“Under these circumstances, how can there be a meaningful privatisation,” said a source, adding without improving law and order situation, it would be difficult to promote privatisation.

The process of privatisation, he said, has slowed down due to the fast developing political situation in the country.

One of the important transactions, he said, was the privatisation of Pakistan Steel which is not expected to come up in the near future. The conditionalities attached to transaction were that its non-core assets, like housing colony, offices, etc., must be separated before inviting bids from local and foreign prospective buyers.

“The Sindh government continues to demand that the huge land attached to the mills be handed to it before putting the entity for sale,” a source said.

The privatisation minister told the meeting that the government was keen to maintain momentum to strengthen, deepen and broaden the base of capital markets through the public offering of shares of public sector entities.

This, he said, was being pursued after successful Global Depository Receipts (GDRs) of Oil and Gas Development Company Limited (OGDCL), United Bank Limited (UBL) and the largest-ever Initial Public Offering of Habib Bank Limited (HBL) which was oversubscribed 2.33 times.

The PC Board was also informed that successful completion of the HBL IPO represents yet another milestone achieved by the Privatisation Commission.

The HBL IPO is the largest offering ever in Pakistan in terms of both value and number of successful applicants.

Total subscription of Rs18.94 billion has been received against a base offer of Rs8.11 billion (excluding Greenshoe Option).

The HBL-IPO consisted of a five per cent offer (34.5 million shares) with an additional Greenshoe Option of 2.5pc (17.25 million shares).

Keeping the objectives of the government’s ‘privatisation for the people programme’, shares were offered for the first time in lots of 100 and multiples of 100 up to 500 shares, and, thereafter, multiples of 500 shares.

This made the subscription affordable for common man. The subscription of HBL shares commenced on July 26, and closed on July 31.

The PC Board constituted a pre-qualification committee for the privatisation of 26 PTDC motels and restaurants, which received encouraging response from 37 parties.

The meeting also reviewed the progress and status of various ongoing and upcoming transactions, including IPO of Pakistan Steel Mills Corporation, Services International Hotel, Republic Motors and Hazara Phosphate and Fertilisers Limited.

Earlier, the PC Board condoled the tragic death of its secretary, Arif Mansur, and his wife. The participants offered Fateha for the departed souls and lauded the services rendered by late Mr. Arif Mansur, stating him as a hardworking, intelligent, devoted, honest and outstanding civil servant.

Members of the Board of the Privatisation Commission, senior officials of the respective ministries and departments attended the meeting.