ISLAMABAD, May 2: As four leading firms appear ready to run for 51 per cent strategic shares, the government has decided to complete the privatization process of Pakistan State Oil (PSO) by August 31, 2002, and wind up the bid payment process in two instalments from the successful bidder.

Petroleum Ministry sources told Dawn that four key investors have initially promised to compete for 51 per cent shares of state-run oil giant PSO.

These include Kuwait Petroleum Company, Caltex and Dawood Hercules.

Shell, the second largest marketing company in Pakistan would not be contesting directly but would indirectly run for the prized oil business, these sources said. A number of other companies mainly from the United States, Saudi Arabia and Canada are also expected to join the race.

The privatization adviser, JP Morgan, would short-list the qualified bidders by June 15, once all the bidders submit their requests by May 31. This would be followed by a three-week due diligence process in which no bidder would be allowed to contact the privatization commission or PSO and would be dealt with by the privatization adviser.

The final bids would be open for acceptance by the government for 90 days after the deadline. The sealed bids would be opened behind the closed doors but in the presence of representatives of the bidders. No announcement as to the success of the bids will be made on the bidding date.

A non-refundable payment as first instalment will be paid by the successful bidder within seven days of receiving letter of acceptance from the commission. At least five working days prior to the anticipated closing date, the Privatization Commission will notify to the successful bidder of the sale consideration. On the closing day, the balance of the sale consideration less the first instalment less the success fee payable to JP Morgan will be paid by the successful bidder.

The first and final instalment shall each be paid to the privatisation commission via wire transfer.