ISLAMABAD

Without facing any political pressure, the PML-N government has successfully initiated the privatisation programme after eight years by disinvesting the shares of United Bank Limited in world equity market that would generate $387 million for the national kitty.

“The government has disinvested its remaining shares, 241 million, of UBL at floor price of Rs 158 against the offer price of Rs 155, which will generate $387 million”, said Mohammad Zubair, Minister of State for Privatisation Commission while addressing a press conference on Thursday. Out of $387 million, $310 million will be foreign exchange component while the remaining amount is the rupee component, he added. Muhammad Zubair said that now there was no government share in UBL. He informed that government has received overwhelming response from the international as well as from domestic investors in buying UBL shares. “This is the first transaction of Privatisation Commission in last 7-8 years”, said Mohammad Zubair and added that it was challenging target for the Privatisation Commission to ease out fiscal space for the government by disinvesting shares of public sector entities.

“More than 40 of the world’s leading equity funds including Templeton, Wellington, Everest, Lazard, Morgan Stanley, Blackrock, etc participated in the UBL share transaction”, said the State Minister for Privatisation Commission. The total demand received from the domestic investors was $12.3 billion, which is one of the highest in terms of domestic demand in Pakistan’s Capital Market history, he added. Sharing the future privatisation plan, the State Minister said that government would disinvest the shares of Pakistan Petroleum Limited (PPL) by the end of June 2014. “The government has budgeted Rs 198 billion from privatisation process during next financial year 2014-15, however I have assured the Prime Minister that amount will be exceeded than the estimates”, Zubair said.

He informed that government would generate Rs 260 billion through privatisation process during calendar year 2014. Giving break-up of Rs 260 billion, the State Minister said government would fetch Rs 120 billion from disinvesting shares of Habib Bank Limited, Rs 80 billion from Oil and Gas Development Company Limited (OGDCL), Rs 40 billion of United Bank Limited (UBL), Rs 15 billion of Pakistan Petroleum Limited and Rs 10 billion from disinvesting shares of Allied Bank Limited (ABL). Talking about the privatisation of PIA and PSM, Mohammad Zubair admitted that government would appoint the financial advisor of Pakistan International Airlines in current month of June 2014. However, the privatisation of Pakistan Steel Mills would take time, as government would restructure it first.

Earlier, Finance Minister Senator Ishaq Dar chaired a meeting of the Cabinet Committee on Privatisation (CCoP) to consider the offer for divestment of GOP residual shares in UBL. The CCoP approved divestment of 19.8pc of GOP shares today. Book building for divestment of government shares concluded yesterday at 9 pm Pakistan time. With the divestment of UBL shares Pakistan has re-entered the world equity market after almost 8 years.  It was further informed that the transaction will raise equivalent of $387 million out of which 310 million will be foreign exchange component while the remaining amount is the rupee component. Around 90pc of the proceeds will be used for debt retirement and 10pc for poverty reduction.