ISLAMABAD, Oct 23: Five parties pre-qualified for taking part in the privatisation process of Heavy Electrical Complex (HEC) are in the process of completing the important phase of due diligence of the transaction in the data room.

So far three parties have completed the due diligence while two parties are in the process, which is expected to be completed by November 2007, says a press release issued by the Privatisation Commission on Tuesday.

The five pre-qualified parties include ABB (Pvt) Limited, Switzerland; Areva T and D, France; Pak Elektron Limited (PEL); Siemens (Pakistan) Engineering Company Limited, Karachi; and Iljin Heavy Industries Company Limited, Korea.

A committee evaluated these parties for pre-qualification on the basis of the information submitted by them in the Statement of Qualification. All terms and conditions relating to privatisation of HEC shall be communicated to all bidders from time to time prior to the bid date. Information memorandum, bid documents and timeframe for the pre-bid conference and bidding date will be provided to these pre-qualified parties only.

The Privatisation Commission had invited Expression of Interest (EOI) from prospective investors (mechanical engineering, electrical engineering and or industrial companies and groups, consortium of investors with ability to own, efficiently manage and operate the company) for the acquisition of a minimum 90 per cent shares of HEC together with management control on an ‘as is, where is’ basis.

Heavy Electrical Complex is one of the industrial units of State Engineering Corporation (SEC) engaged in the manufacturing of power transformers of different types (total annual capacity 3,000MVA) with primary voltage rating of 66 and 132KV. In addition, the HEC undertakes repair and refurbishment of old and damaged power transformers up to 500KV.

HEC was incorporated as a private limited company in 1991 and commenced full-scale commercial operation in 1997. It is

located in Hattar Industrial Estate, about 65 km from country’s capital Islamabad. HEC is spread over an area of 81.379 acres. A total of 63 acres of land is included in the transaction; out of which 20 acres is non-core land for expansion.

Major clients of HEC products include Wapda, its corporate entities and KESC.

HEC has six main manufacturing shops namely: machine shop, winding shop, insulation shop, core shop, fabrication shop and assembly shop. In addition HEC has an oil purification shop, high voltage test laboratory equipped with 250 tons overhead travelling crane.

HEC can diversify its manufacturing range by including other products such as instrument transformers, high voltage circuit breakers and other grid stations equipped for meeting demand of the products in domestic and foreign markets.

The purchaser shall continue to operate company’s manufacturing facility and shall not in any way abandon, cease to operate or otherwise shutdown the company’s existing manufacturing facility. He will not in any form or manner dispose off, alienate, transfer any or all land in the name of the company without the prior consent of PC.

The cost of Golden Hand Shake Scheme (GHS) for permanent workers and Voluntary Separation Scheme (VSS) for the executives will be shared equally between the new buyer and the Privatisation Commission.

The bidder shall bid on the basis of audited accounts of June 2006 and may also factor the latest un-audited accounts available prior to the bidding. The loan from government of Pakistan amounting to Rs1,002 million will be written back in the books of HEC and the tax impact after adjustment brought forward losses of Rs376.708 million shall be borne by the Privatisation Commission.Privatisation Commission had received ten (10) expressions of interest (EoIs) and statement of qualification (SOQ) from the interested parties to participate in the privatisation process of Heavy Electrical Complex (HEC). Ends: