KARACHI, Feb 23: Shares in Pakistan International Airlines (PIA) will be offered next month, while the Pakistan Petroleum Limited (PPL) would make the Initial Public Offering (IPO) for public subscription, hopefully, in April.
This was stated by Federal Minister for Privatization and Investment, Dr Abdul Hafeez at the computer balloting of applicants in the recently conducted IPO of Sui Southern Gas Company Limited (SSGCL) at the company's Head Office on Monday.
He said initially five per cent shares of PIA and PPL would be offered to the general public with a green shoe option (GSO), and another five per cent in case of oversubscription.
Regarding the floor price of the shares, he said it would be decided in the meeting of Cabinet Committee on Privatization to be held on February 26. He said the privatization process of the Karachi Electric Supply Corporation (KESC) will be completed in June this year.
So far four parties from Malaysia, Saudi Arabia, the United Kingdom and Canada have submitted expressions of interest (EoIs).
Currently, these EoIs were being scrutinised and they would then undergo a due diligence process. On the privatisation of Pakistan State Oil (PSO), the Minister did not give any specific details, saying the government has a firm policy on it and its privatisation will be done on its time.
Hafeez Shaikh said that a total of Rs42 billion had been mobilized through the privatization process in which Rs17-18 billion was raised through the stock exchanges.
On utilization of privatization proceeds, he added that 90 per cent was being utilized for debt retirement while the remaining 10 per cent for poverty reduction.
He admitted that there was a market perception that the ordinary Pakistanis have been sidelined in the entire privatization process and that the privatisation was only a rich man's game. But he brushed that aside as an incorrect perception.
The minister emphatically added that such was not the case and the ordinary people were also enjoying the benefits of privatization. "I think that the market has enough liquidity and it is right time to tap it by giving investment opportunities to the ordinary people to buy shares," he added.
"The positive response in National Bank of Pakistan (NBP) followed by Oil and Gas Development Company (OGDCL) are a clear manifestation that ordinary citizens are fully reaping the benefits of privatization," he said adding that small investors had made a profit of Rs20,000 on investment of Rs32,000 in two months, in the OGDCL shares. He said in the privatization of entities, small share holders were being given preference.
He said a total of 258,089 applications for subscription for minimum 500 shares, had been received for the public offering of SSGCL shares, while 243,598 applications were received for lots of 1000 shares.
Around 67,117 applications were picked up in the computer balloting on Monday. Around 5,442 applicants had subscribed for 2,000 shares followed by 1,949 applicants for 3,000 shares and 2,652 applicants for bigger lots.
"It is a new record set for number of applicants", he said and added that considering the present market value of SSGC share, successful applicants were likely to make sizable immediate profit.
He said unsuccessful bidders in the SSGCL shares would start getting the refund of their amount in the next 10 days as per law. On foreign direct investment, he said that the current year may prove a good year in terms of foreign investment as $400-500 million was expected to be invested in only the telecom sector.