ISLAMABAD - The government would disinvest the 70 million shares of Pakistan Petroleum Limited tomorrow (Friday), as Cabinet Committee on Privatization (CCop) has approved the floor price for book building process for the offer of government’s shares in PPL transaction.
Minister for Science and Technology, Zahid Hamid chaired a meeting of the Cabinet Committee on Privatization (CCoP) on Wednesday to consider floor price of GoP shares in Pakistan Petroleum Limited (PPL). The Minister for Science and Technology chaired the CCoP meeting in the absence of Finance Minister Senator Ishaq Dar who is currently in Jeddah to attend the 39th meeting of Board of Governors (BOG) of Islamic Development Bank (IDB).
The CCoP approved the recommendation of the PC Board regarding the floor price for book building process for the offer of GoP shares in PPL transaction which is scheduled to start at 9am PST tomorrow and will conclude at 5:00 pm PST on Friday June 27. The ‘strike price’, i.e. price of PPL share determined/discovered on the basis of book building and at which price PPL share will be offered to successful bidders, will be determined through the Dutch Auction Method. Minister of State for Privatization, Muhammad Zubair, in a detailed briefing, explained that the transaction structure of Pakistan Petroleum Limited (PPL) envisages offering 70 million shares to both international and domestic institutional investors and High Net Worth individuals (HNWI). Presently, per share price of PPL is around Rs 211, but analysts argue that if the government sets the price at around Rs 205 per share, it will receive tremendous capital market response. Sources informed that government is expecting to generate minimum Rs 15 billion through disinvesting the percent shares of PPL.
The transaction marketing road shows were held in Karachi, Lahore, Islamabad, Sialkot and Faisalabad from June 19, 2014 to June 23, 2014. Privatization Commission had got requisite approvals from stock exchanges and Securities & Exchange Commission of Pakistan relating to the transaction structure, allotment mechanism, and other approvals required for the transaction. The CCoP meeting was attended by Minister for Commerce, Khurram Dastagir Khan, Minister for Information, Broadcasting and National Heritage, Senator Pervaz Rasheed, and Federal Secretaries of various ministries. It is worth mentioning here that this would be the second privatization activity of the incumbent government in last two weeks, as earlier on June 11 it disinvested the shares of United Bank Limited which generated $387 million for the national kitty.