ISLAMABAD, Jan 14: The Privatization Commission on Wednesday obtained clearance from the Security and Exchange Commission of Pakistan to float 5-10 per cent shares of Sui Southern Gas Company through stock market on January 26-28.
According to officials concerned, the Privatization Commission will publish a full-page prospectus, technically known as "abridged offer of sale document", of SSGC on Friday in various newspapers after which prescription of the company will be opened for the sale of the shares. This is the second offering of shares of the company to the general public.
The sale of initial five per cent comes to 33.56 million shares that were expected to be doubled after the sale of another five per cent shares in case of oversubscription.
An official told Dawn that after having received the much-awaited clearance from the SECP, the Privatization Commission had contacted the authorities of the stock exchanges to give date preferably on January 26-28 to initially float the five-per cent shares of SSGC.
The officials were expecting oversubscription of five per cent shares would be followed by another five per cent 'green shoe' option like that of OGDCL. An official said the OGDCL shares were eight times oversubscribed and provided more than Rs28 billion against the expected Rs3.44 billion. "The Privatization Commission is offering Rs6.6 billion advance profit to the new shareholders before the sale of SSGC shares," he said, adding that a share of SSGC was sold at Rs31 on Wednesday, while the Privatization Commission would offer it at a price of Rs26 each share that meant Rs5 straightaway profit to the buyers.
"Preference will be given to the applicants of 1,000 shares and then to those who wish to buy 2,000 and 3,000 shares," a source said, adding the purpose was to make the company's ownership broad-based. He said roadshows would be held at Karachi and Lahore on January 16 and 19, respectively.
The company, he said, had a huge five-year Rs34 billion expansion programme and that its certain rate of return was guaranteed by the government. He said foreign lenders had been assured of the fixed percentage of net assets of the company.
About the strategic sale of SSGC, another official said that a restructuring of the company had been proposed that was expected to be taken up shortly. In fact there will be an unbundling of the company to have separated transmission and distribution networks, he said.
SSGC is a public limited company incorporated under the Companies Ordinance 1984 and listed on the Karachi, Lahore and Islamabad stock exchanges. Currently, the government owned 70 per cent shares of the gas company, while 25 per cent shares were being maintained by the banks and other business institutions. And five per cent shares of the company are already being traded in the market through stock exchanges.