ISLAMABAD-The COVID-19 has impacted the pace of ongoing privatisation programme, as transactions of public sector entities (PSEs) are unlikely to complete due to the prevailing situation during current fiscal year.
The government had projected to generate around Rs400 billion by privatizing the public sector entities before June 30, 2020. The government had projected to generate Rs150 billion through privatization programme in budget for the year 2019-2020. However, later, it had decided that privatization of 6 public sector entities and selling 27 government owned properties will generate around Rs400 billion before June 2020.
The PSEs included, SMEs Bank, First Women Bank, two RLNG power plants including Haveli Bhadar Shah and Balloki, government’s 18.5 percent shares in Mari Petroleum Company Limited as well as Services International Hotel Lahore and Jinnah Convention Centre Islamabad.
“The COVID-19 has impacted the pace of ongoing transactions but the work on all fronts have been carried out with requisite precautions, and it is expected that after the pandemic ends the desired pace to complete the transactions will be attained/resumed, “ the Privatisation Commission said in a statement on Tuesday.
Federal Minister Mohammadmian Soomro along with Privatization team is working on the ongoing privatization plan steadily. The Financial Advisors (FAs) appointed for Pakistan Steel Mill (PSM) have submitted the first draft of due diligence (DD) report, which subsequently is reviewed by the transaction committee of Pakistan Steel Mills.
First meeting to that effect was held on April 15th this year via video link owing to current pandemic which was followed by second review meeting on 23rd April. It is pertinent to mention that for the revival of PSM potential partners are also being approached. The Privatization of Heavy Electrical Complex (HEC) is also underway and revised draft of due diligence is received on April 22nd, 2020.
This has pushed the timeline for all succeeding deliverables by a month. The COVID-19 impact on transaction implementation is currently uncertain but transaction structure is to be formalized so that it can be launched for implementation, quickly post COVID.
The privatization of power plants of Haveli Bahadar Shah and Balloki is at advanced stage. PC and financial advisors are working with pre-qualified parties and their advisors to complete buyer-side due diligence. Virtual Data Room (VDR) has already been established by the PC to provide required information to investors to participate in the pre-bid meeting which will be convened with mutual consent soon.
Moreover, conference calls are repeatedly being arranged to answer the queries of investors and to furnish them with requisite information and assistance to proceed with the transaction. Work on Guddu and Nandipur power plant is also in progress and DD by the advisors (UBL & EY) is actively being pursued, NandiPur management team has been asked to furnish the financial, technical, legal and regulatory data to the Ministry for self side due diligence.
As far as Guddu power plant is concerned three interested parties were shortlisted to be appointed as financial advisors. Technical and Financial proposals have been received to that effect. Moreover the issues related to gas allocation, license modification and release of charges have been referred to Power Division.