Pakistan Today

8 state-owned entities to go under the hammer

The government would revive the privatization process by the complete sell off of 2 state owned entities along with the plans to offload 5 percent shares of six profitable energy and financial sector entities during the current fiscal year.
An official source at the Privatization Commission said that the privatization plan would generate close to Rs 86 billion, including the intended $500 million Oil and Gas Development Company Limited (OGDCL) exchangeable bonds during the current fiscal year.
He said that in the first phase the Heavy Electrical Complex (HEC) and the National Power Construction Company (NPCC) would be sold along with their management control by December, this year. NPCC, he said, would be sold completely that would fetch close to $42 million. Only 26 percent shares of HEC would be sold along with the management control. It would generate Rs 3 billion. The first phase also includes offloading of 2.5 percent share of the Pakistan Petroleum Limited (PPL) that would generate Rs 6 billion.
During the second phase, the government plans to offload 5 percent shares of the National Bank of Pakistan (NBP) estimated to generate Rs 5 billion, Habib Bank Limited (HBL) Rs 6 billion, National Insurance Company (NPC) Rs 10 billion and State Life Insurance Company (SLIC) Rs 9 billion.
If the response in the shares of these state owned entities is over whelming then the government may opt for enhancing the transaction size by up to 10 percent, he said adding that it would all depend on the market conditions and response. The offloading of the shares would increase the depth at the local stock exchanges and also would attract listing of the other private sector entities.
About the floating of the OGDCL exchangeable bonds, he said that the government would make a final decision on the advice of the financial advisors. He said that the government had decided not to float the bonds in June as the international investors have advised wait till the resolution of Greek debt crisis.
He said that the financial advisors were likely to give advice by July 15, whether Pakistan should enter the market or wait for another month. He said that 19 countries have held road shows for their exchangeable bonds but were waiting for the conditions to improve. He said that Pakistan would only venture forth if some AA rated country opts for the international bond market.

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