ISLAMABAD, Nov 10: The Privatization Commission Board (PCB) on Monday recommended to the Cabinet Committee on Privatization (CCoP) to accept the highest bid of Rs10.85 per share for 90 per cent shares of Thatta Cement Company Limited (TCCL) offered by Star Cotton Corporation.

The PCB meeting, presided over by Privatization and Investment Minister Dr Abdul Hafeez Shaikh, was informed that total bid price of Star Cotton Corporation would come to Rs1.19 billion.

As a break-up, the meeting was told that total price of 90 per cent shares of TCCL at the rate of Rs10.85 would come at Rs778.997 million. In case, the employees of TCCL fail to purchase 10 per cent of their allocated share, the successful bidder would be required to pick up this chunk as well at Rs86.5 million.

The bidder is also required to pay Rs77.1 million as GHS/VSS to the employees of TCCL and repay Rs247.6 million to the State Cement Corporation of Pakistan (SCCP), which TCCL had borrowed. As such, the total bid price for complete takeover of TCCL would cost Rs1.19 billion to the new buyer.

The PC Board was informed that top three bidders of the previous bidding were allowed to participate in the rebidding of 90 per cent (71.797 million) shares of TCCL at the base price of Rs9.05 per share under directives of the CCoP.

Employees & Management Group of Thatta Cement Company was 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 hence left out of the bidding.

The meeting was also informed that the amount received in excess of the required Rs604 million for the third public offer of 13.1 million shares of National Bank of Pakistan (NBP) had been refunded to the applicants.

The Privatization Commission had received applications worth Rs1.22 billion, which was double the required amount in response to its offer to the general public. Subscription for this issue was held on October 13-15, 2003.

The government had offered 13.13 million shares of NBP to the public at a price of Rs46 per share. Applications were invited in lots of 500 shares or multiples thereof. Preference for allocation was given to the smaller applicants for 500 shares. The remaining shares had been allocated to applicants on pro rata basis, the meeting was informed.

The PC Board also reviewed the progress on the sale of Karachi Electric Supply Corporation (KESC) and Habib Bank Limited (HBL). The meeting was informed that in response to the invitation to the investors on September 29, 2003, the Commission had received five expressions of interest (EoIs) from reputed utility operators and strategic and financial investors interested in acquiring up to 73 per cent of the equity in KESC with management control.

The Asian Development Bank has already agreed to take about 7.67 per cent equity interest in KESC from the available 73 per cent shares at the matching price of the highest bid.

The parties/consortium of parties submitting the EoIs include: ABB (Pvt) Ltd, USA; Corner Stone Partners LLC, USA; Hasan Associates (Private) Limited Consortium, including Al Bayarak Al Baida Co of Kuwait; and IOSKOM of Turkey; Independent Power Corporation PLC, UK; and Kanooz Al Watan for Project LLC, Saudi Arabia.

The government has undertaken to continue with the approved current investment programme until June 2006 to upgrade the transmission and distribution system and to underwrite the formula based tariff regime as determined by the National Electric Power Regulatory Authority (Nepra), in September 2002.

Parties with relevant credentials who have submitted EoIs will be dispatched request for statement of qualifications (RSoQ).

While reviewing the present status and the progress of HBL privatization, the meeting was informed that the potential bidders were in the process of completing their due diligence.

A meeting was held with the potential bidders and matters to take the transaction forward towards bidding point were discussed in detail.