ISLAMABAD – The Privatisation Commission (PC) has planned to launch convertible bonds worth $1.384 billion of Oil and Gas Development Authority and Pakistan Petroleum Limited (PPL) in 2011. Deadline for the launch of convertible bonds of Oil and Gas Development Authority worth $1.08 billion and convertible bonds of Pakistan Petroleum Limited (PPL) worth $304 million at the London Stock Exchange, as proposed by PC, is end of March.
A meeting of the sub-committee of Cabinet Committee on Privatisation (CCOP) on issuing equity-linked instruments recommended the roadmap for capital market transactions for the Financial Year 2011. PC expects to generate $3.0 billion by launching convertible bonds of OGDC, PSO and PPL. According to a senior official, $1.08 billion could be arranged through convertible bonds of OGDCL in London Stock Exchange. Convertible Bonds would be for six percent shares of OGDCL at an annual interest rate of 4.5 percent.
Proceeds of the CBs could be used for development of newly discovered oil and gas fields in Sindh and Khyber Pakhtunkhwa. This would increase annual profits of OGDCL from $1.5 billion to $2.5 billion per annum. The CCOP had formed the sub-committee, under the chairmanship of Federal Minister for Privatisation on February 3 in order to formulate recommendations for the issuance of equity linked instrument of State-owned Entities (SoEs) in the capital market.
The Committee considered the methodology for implementation of the roadmap and agreed in principle to administer jointly the exchangeable transactions in the Oil and Gas sector, in addition to listing of other entities by Privatisation Commission and the Finance Division.
A steering committee, comprising all stakeholders i.e. the Planning Commission deputy chairman, Finance Division secretaries, Privatisation Commission, Petroleum and Natural Resources, representatives form State Bank of Pakistan and Securities and Exchange Commission of Pakistan will undertake selection of the Financial Advisor, while sub-committee of the CCOP will supervise the whole process.
The Committee also formed its recommendations for Initial Public Offerings (IPOs) and Secondary Public Offerings (SPOs) of various PSEs. These recommendations will be presented in the upcoming meeting of CCOP.
