Pakistan's national oil company to be privatised

Pakistan's Privatisation Commission is organising a 70 percent sell-off of the state oil company, attracting interest from Kuwaiti, Saudi and Pakistani companies

    Pakistan's Privatisation Commission workload has increased substantially this week, with its invitation to corporate and individual service providers to help the government in the privatization of the Habib Bank Limited and with the rescheduling of the opening of bidding for the sale of a major stake in the Pakistan State Oil company – a move which tops the government's broader privatisation agenda.

    The commission’s spokesman announced with regard to HBL that “professional individuals or companies will be invited to engage in the business of extending contractual expertise and technical assistance to banks and the capital market in particular.”

    The technical assistance referred to will include designated chartered accountancy, legal counseling, vetting of reports, identifying and qualifying potential buyers, valuation and reference price determination.

    HBL management is also expected to coordinate with the incumbent management to expedite the process of privatization. May 15 is the deadline for submitting notice of interest from potential buyers – and the PO will interview only short listed companies for final selection.

    At the same time, the PO is also reorganizing the privatization of the Pakistan State Oil Company, a state-run company that controls 70 percent of the petroleum products business, officials said Saturday.

    Pakistan State Oil is one of the best-performing corporate entities in
    Pakistan. Profits increased five-fold in the six months ending December 31 to 2.06 billion rupees ($35.5 million). It has announced a 60 percent interim dividend for shareholders.

    Two Middle Eastern outfits, the Kuwait Petroleum Company and Midrock of Saudi Arabia, and Pakistan's Fauji Foundation have emerged as the three main bidders.

    "We have invited all three potential buyers to hold a meeting with the commission," a commission spokesman said. "The meeting is likely to come out with a final date for PSO's privatisation," but suggesting that the bidding would now take place in eight to ten weeks.

    The opening of tenders had been scheduled for last Saturday, but was postponed to facilitate travel plans of prospective buyers at their request, the PO’s statement informed.
    News of the pre-bid meeting boosted PSO's share price on the Karachi Stock exchange to 202 rupees early Tuesday, but late rumours of a possible postponement brought the price back down to 184.20 rupees by the close of trade amid apprehension that the privatisation timetable would be delayed more than two months.

    “Investors became jittery when there was no statement from the commission before the close of trade,” said Mohammad Sohail, Head of Research at InvestCap, adding that share prices are likely to go back up once details and dates are published.



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