ISLAMABAD, Dec 4: Encouraged by the overwhelming success of initial divestment of Oil and Gas Development Company Limited (OGDCL) the government has decided to make initial public offerings of four major state-owned entities during the January-March 2004 period.
Privatisation and Investment Minister Dr Abdul Hafeez Sheikh told a news conference here on Thursday that starting with Sui Southern Gas Company Limited (SSGC), Pakistan International Airlines (PIA), Pakistan Petroleum Limited (PPL) and Kot Addu Thermal Power Company (Kapco) would be offered to the general public during the first quarter of next calender year.
He said the OGDCL’s IPO experience showed how much liquidity was available with the people and the extent of their keenness for good investment opportunities and, therefore, it was the right time to offer big issues having very good financial position and reputation.
In reply to a question, privatization consultant Faiz Jalal explained that a total of 10 per cent share of SSGC would be offered to the public, including five per cent through IPO and a five per cent green-shoe option.
He said the Cabinet Committee on Privatisation (CCoP) had recommended to consider the IPO of five per cent shares of PIA, but a final decision would be taken on the advice of the financial adviser. He said it was premature to say how much shares of PPL and Kapco would be offered to the public.
About 36 per cent shares of Kapco along with its management is currently controlled by International Power Company of UK, while the government still owned 64 per cent shares.
Dr Hafeez Sheikh said that the concept of initial public offering would remain an important component of the privatization policy and small investors in Pakistan would always be offered attractive packages.
He said two transactions completed through IPOs — NBP and OGDCL — brought enormous response from the people and both were oversubscribed and benefited the general public.
The minister said the NBP shares, which were sold to the public at Rs46 per share, were now being traded at Rs51 at the stock market.
He said the final results of the OGDCL subscription showed that the public offer of Rs3.4 billion worth of 2.5pc shares attracted Rs28.12 billion, which was eight times oversubscription and a record in Pakistan’s history.
The sale of 12 per cent shares of Pakistan Telecommunication Company Limited in 1995 had fetched higher yield, but major portion of around $950 million was through placement of GDRs abroad. PTCL’s two per cent shares in the local market had fetched Rs3.0325 billion.
He said the OGDCL share sold to the small investors at Rs32 has already reached Rs51 even before its formal trading at the stock market.
As many as 97,570 people applied for 1,000 shares each. Of this, 83,276 applicants had applied for 1,000 shares, while the rest of 14,294 for more than 1,000 shares.
It has been decided, he said, that all the applications for 1,000 share would be accepted, while the remaining share would be given to 14,294 applicants on pro rata basis. All these could be absorbed in the five per cent lot and earn Rs6.88 billion, while the remaining amount would be returned within a week’s time.
In reply to a question, the minister said the government had not decided to offer GDRs of OGDCL in the international market as yet because it wanted to continue with the current momentum in the domestic market.
He said the OGDCL’s formal listing at the stock exchange would take place on January 14, followed by its first share clearance on January 18. The market capitalization has now touched $20 billion mark with the addition of Oil & Gas Development Company Limited in the market and put Pakistan among the emerging markets.