ISLAMABAD, Nov 5: The Privatization Commission on Wednesday received the highest bid of Rs778.997 million at the rate of Rs10.85 per share from Star Cotton Corporation for the sale of 90 per cent shares of Thatta Cement Company Limited (TCCL).

The company had offered a bid price of Rs6.30 per share during the earlier round of bidding held on August 28 this year and stood third. The bidding results were rejected by the Cabinet Committee on Privatization (CCoP) for a price lower than the reference price of Rs9 per share.

The four parties allowed to rebid for TCCL included: Al-Abbas Group of Companies, Karachi; Bestway Cement Limited, Islamabad; Haji Saifullah & Group, Islamabad; and Star Cotton Corporation, Karachi. Bestway Cement Limited abstained from the process despite depositing the earnest money.

Star Cotton Corporation remained the highest bidder with an offer of Rs10.85 per share, making a total offer for 90 per cent shares of TCCL at Rs778.997 million.

Haji Saifullah & Group made an offer of Rs10.75 per share and stood second, while Al-Abbas Group of Companies was third with an offer of Rs9.95 per share. Haji Saifullah Group was the highest bidder in the previous bidding with a bid price of Rs6.70 per share.

Nothing has changed in TCCL since the August 28 bidding. The State Cement Corporation of Pakistan (SCCP), the parent organization of TCCL, has added no further investment in the unit, but the bid price has improved by more than 62 per cent now.

Four parties, who submitted earnest money worth Rs50 million each and took part in the open bidding process held earlier on August 28, were allowed to take part in the rebidding.

The CCoP had instructed the Privatization Commission to rebid the cement unit with a base price of Rs9.05 per share to sell the minimum of 90 per cent of SCCP’s shareholding (71,797,050) in TCCL on “as is where is basis”.

The employees and management group of TCCL was also allowed by the Sindh High Court to participate in the bidding in accordance with the rules and regulations, but they failed to deposit the required earnest money and could not take part in the bidding.

The 10-per cent shares of TCCL have been allocated to the employees. In case they fail to get this chunk then the successful bidder is bound to pick up these shares on the same price per share it has already offered.

As such, the total price for 100 per cent shares of TCCL would stand at Rs865.553 million as per the highest offer received. The bidding took place in accordance with the un- audited accounts of September 30, 2003.

In case of approval by the Privatization Commission Board and the CCoP, the successful bidder would be required to return a loan of about Rs248 million to the SCCP. The buyer would be required to make five per cent payment within seven days of the letter of acceptance, while balance amount would be paid within 30 days.

The highest bid and bidding results would be sent to the CCoP along with the PC board’s recommendation for approval or otherwise.

Thatta Cement was incorporated in 1980 as a limited company under the Companies Ordinance 1913 (now Companies Ordinance 1984) and is a wholly owned subsidiary of the State Cement Corporation of Pakistan.

The unit is located at 115 km in the northeast of Karachi at Makli Ghulamullah Road, Thatta. The plant is based on dry technology and has capacity of 1,000 tons per day production. The plant started commercial operation in December 1982 and is fully operational.