PC Board Approves PSM Transaction Structure

PC board approves PSM transaction structure

ISLAMABAD, (Pakistan Point News - APP - 17th Jan, 2017 ) : Privatisation Commission (PC) Board Tuesday approved the transaction structure for the restructuring of Pakistan Steel Mills (PSM) proposed by its financial advisors. The decision was taken during the PC Board meeting held here, a commission's statement said. The proposed structure, which is set to be presented to the Cabinet Committee on Privatisation (CCoP) in coming days, include a tripartite concession agreement between GoP, PSMC and the investor for a period of 30 years on the basis of revenue sharing.

The PSM's land would remain with the government while the plant and machinery would be handed over to the new company for a maximum of 30 years. No asset of PSMC would be sold. The board members also approved the transaction structure of SME Bank which included sale of 93.88% shareholding of the Government of Pakistan (GoP). Based on the proposed structure, State Bank of Pakistan (SBP) is to allow a reduced Minimum Capital Requirement (MCR) of PKR 6 billion on staggered basis over five years, with PKR 2 billion upfront and PKR 1 billion each for the next four years.

The SBP would also issue a new banking license of a specialized nature with at least 60% advances for the SME sector to the investor while also allowing Capital Adequacy Ratio (car) at 10% for five years post-privatisation. Based on the request from Ministry of Information, the PC board agreed to delist Shalimar Recording and Broadcasting Co. Ltd from the privatisation programme, while it agreed to constitute a committee to evaluate the viability of delisting Sindh Engineering Limited (SE) which has been requested by the Ministry of Industries and Production.

The committee would assess the legal status of the SE assets and provide a comparative analysis in case of privatisation and restructuring or delisting of the entity. The board also approved the initiation of process for hiring of financial advisors for Pakistan Re-Insurance Co. Ltd, National Insurance Co. Ltd. and Heavy Electrical Complex (HEC). The board members also approved the initiation of capital market transaction of the OGDCL shares up to a maximum of 5%. This would be a domestic offering.