ISLAMABAD, Sept 25: The Pak-American Fertilisers Limited (PAFL) offered on Thursday the highest bid of Rs1.206 billion to purchase 90 per cent stakes and management control of the Hazara Phosphate Fertilisers Limited (HPFL) at the rate of Rs70 per share.

At this rate, the total value (100 per cent shares) of the company comes to Rs1.34 billion. The remaining 10 per cent shares have been allocated for company employees. In case, the employees opt not to purchase these shares, the new buyer will take over the remaining 10 per cent shares as well.

The open bidding for the sale of 90 per cent state-owned shares in Haripur-based HPFL attracted four pre-qualified bidders, namely Akbar Brothers and Green Force Limited consortium from Multan, Kissan Chemicals and Fertilisers and Chaudhary Steel Re-Rolling Mills Limited consortium of Lahore, Pak American Fertilisers Limited and Warble (Pvt) Limited of Lahore. The bidding was held on “as is where is basis.”

In the first round, Akbar Brothers and Green Force Limited consortium offered the highest price of Rs69 per share (Rs1.1889 billion) for the company’s 90 per cent shares.

In the second round, three highest bidders were asked for competition to improve the price beyond Rs69 per share.

The Lahore-based PAFL, which was originally second highest with a per share offer of Rs48 during first round of the open bidding, improved its bid to Rs70 per share in the second round as others decided not to go beyond this price.

The authorised representative of the Pak-American Fertilisers Limited Ahmed Jauded Bilal said the new buyer would enhance efficiency and profitability of the company through expansion and cost cutting measures.

Secretary, privatisation commission, Ahmed Jawad, who presided over the bidding ceremony, said the highest offer would be considered by the Privatisation Commission Board and it would submit its recommendations to the Cabinet Committee on Privatisation (CCOP) for approval.

According to the standard procedure, the successful bidder would be issued letter of acceptance after the CCOP’s approval and the buyer would be required to deposit 25 per cent of the bid price within 14 days after the issuance of LOA.

The remaining 75 per cent of the bid price is required to be deposited within 60 days, he said.

He said three other transactions, including SME Bank, Heavy Electrical Complex (HEC) and National Power Construction Company (NPCC), were scheduled for bidding during October 2008 and efforts were being made to bring forward 16 transactions for privatisation within the current year.

The PC had invited expressions of interest from prospective investors engaged in manufacturing or engineering business capable to own and efficiently manage company.

The factory is situated on 57 acres of developed land in Haripur district and includes plant, housing and ancillary facilities.

National Fertiliser Corporation of Pakistan (Private) Limited (NFC) owns Hazara Phosphate Fertilisers (Private) Limited. HPFL is a state-owned private limited company, registered under the Companies Ordinance 1984.

The authorised share capital of the company is Rs200 million divided into 20 million ordinary shares of Rs10 each whereas the issued, subscribed and paid-up capital of the company is Rs191.143 million, comprising 19.143 million ordinary shares of Rs10 each. National Fertiliser Marketing Limited (NFML) is currently carrying out marketing of the product of HPFL.

The purchaser shall, however, be free to market the product using its own arrangement.

The government of Pakistan in order to encourage use of phosphatic Fertilisers is currently providing a subsidy of Rs956 per bag effective from July 1.

To improve the profitability of HPFL, the federal and the NWFP governments are endeavoring to make available local phosphate rock as raw material through enabling environments from the private sector mining companies.