ISLAMABAD, May 5: The government has decided to sell up to 20 per cent shares, instead of originally planned 10 per cent, of Pakistan Petroleum Limited (PPL) through initial public offering (IPO) by end of this month, Dawn has learnt.

This would be followed by secondary public offering of 10 per cent shares of Pakistan International Airlines Company (PIAC) by mid of June and then 20 per cent initial public offering of Kot Addu Power Company (Kapco) by the end of next month.

A senior government official told Dawn on Wednesday that Privatization Commission board had finalized this structure on Tuesday and the Cabinet Committee on Privatisation (CCoP) would accord formal approval on Friday (May 7).

The government has also decided to offer shares of PPL, PIAC and Kapco in the smaller lots of 500 shares each instead of previously 1,000 shares so that higher number of applicants could be accommodated for market expansion.

The CCoP is also expected to approve bidding results of Kohinoor Oil Mills Limited (KOML). Iqbal Khan of Bara Ghee Mills had offered the highest bid of Rs80.715 million for 60.41 per cent shares of KOML on Tuesday at the rate of Rs255 per share.

The CCoP will also approve the offer price for divestment of PIAC shares in its meeting on Friday and review the status of the proposed privatization of the Faisalabad Electric Supply Company (Fesco).

The meeting would also approve preliminary transaction structure of the privatization of the PPL besides considering the privatization of Bolan Textile Mills Limited (BTML).

The official said the CCoP had earlier approved the sale of 10 per cent shares of PPL in the fashion of five per cent initial public offering and five per cent with green shoe option.

However, it was felt from the SSGC share sales last month that market could expand a lot if IPO of PPL is of higher size but of low denomination. The Privatisation Commission also sought expert opinion from different legal experts whether or not the sale of 20pc share of PPL could have negative impact on strategic sale of the entity.

It was, however, noted that sale of 20 per cent shares would not create any strategic problem because the government owned more than 93pc shares in the company and there was still a lot of room to broaden the market base by enticing new investors.

As such, it was also decided to offer 20 per cent share in the lots of 500 shares each in two parts i.e. 10 per cent IPO and 10 per cent green shoe option so that friends and relatives of investors in National Bank of Pakistan could be lured into the market because they have themselves seen the NBP share price rising.

Earlier, the government had scheduled to make IPO of PIAC first, followed by Kapco and then PPL but has now been re-arranged in the order of PPL, PIAC and Kapco so as to cash in the momentum of the SSGCL in PPL.

The privatisation board meeting had decided on Tuesday that in view of the general public interest the IPO of PPL should be targeted for the last week of May, while Secondary Public Offering of PIAC and IPO of KAPCO should follow during the month of June.

The PC Board recommended that keeping in view the experience of SSGC's Secondary Public Offering where all the more than 250,000 smaller applicants could not be accommodated due to the smaller percentage of the offer, the percentage for PPL, PIAC and KAPCO offers should be raised to a realistic level and fresh approval from CCoP should be sought in this regard.