ISLAMABAD, May 31: The Attock Oil Group on Tuesday offered the highest bid of Rs16.415 billion to acquire 51 per cent shares and management control of National Refinery Limited (NRL) at a rate of Rs483 per share. The offer, about 42 per cent higher than the Rs340-345 per share being traded at the stock market, was declared as successful by Privatization and Investment Minister Dr Abdul Hafeez Sheikh.

The Privatization Commission Board that met soon after the bidding recommended to the Cabinet Committee on Privatization to approve the bidding results for being above the reference price fixed by the committee. The reference price was not disclosed. The successful bidder would be required to deposit 25 per cent of the bid money within 14 days of the issuance of letter of acceptance by the government. The remaining 75 per cent amount would be deposited in 60 days period and then the management would stand transferred to new majority owner, the minister said.

The second highest bidder, a consortium of Crescent Steel and Allied Products and Shakarganj Mills Limited — a Chinioti business family owned by former privatization minister Altaf Saleem — was way behind. It offered a bid price of Rs260 per share or Rs8.836 billion, which was about 86 per cent lower than the Attock Group’s offer.

The third bidder, Fauji Foundation, a business corporate wing of the Pakistan Army, offered a bid price of Rs197 per share or Rs6.695 billion for 51 per cent shares. This bid was more than 145 per cent lower than the highest bid. As the highest bid was much higher than the second bid, the privatization minister said there was no need for a second round of open bidding. He said the open bidding should have taken place if the difference between the bids remained less than 2.5 per cent. The three bidders were asked to submit sealed bids one by one and were opened by reporters. The rest of the eight bidders pre-qualified by the Privatization Commission did not take part in the bidding.

The parties who were pre-qualified but did not deposit earnest money to take part in the bidding include Abraaj Green Consortium, Al-Ghurair Investments, Gharibwal Cement and Consortium, Gul Ahmed Group, KPC Holdings (Aruba) AEC, Lukoil International Trading and Supply Company, and Pakistan Refinery Limited.

Privatization Commission officials said they could not say on behalf of other bidders why they had not turned up. They said six bidders took part in the pre-bid conference held last week and it was clear that some of them would stay away because of a pre-condition to deposit Rs300 million as earnest money to show their seriousness.

A total of 29 parties had originally submitted expressions of interest (EoIs) but 11 of them were pre-qualified on the basis of their technical and financial capabilities. The EoIs from the interested parties to acquire 51 per cent shareholding and management control in the company were invited on October 23, 2004. Twenty-nine parties responded. Citibank Group Markets acted as financial advisers.

The NRL’s net sales during the last fiscal year were more than Rs40 billion, and profit after tax was Rs1.850 billion. The company was incorporated on August 19, 1963 as a public limited company. The refinery complex comprises two lube refineries, a fuel refinery and a Benzene, Toulene and Xylene plant, located in the Korangi Industrial Area in Karachi. The company’s designed crude oil processing capacity is about 2.7 million tons per year (62,050 barrel per day) with a broad range of petroleum products. NRL has an 80 per cent share of the LBO market and 80 per cent of asphalts. It also produces speciality oils and slack waxes.

In addition to indigenous blenders, LBO produced is sold to several MNC marketing companies where it serves as a key component in the production of high-end branded lubricants.

Led by leading Saudi business tycoon, Dr Ghaith R. Pharaon, the Attock Oil Group consists of The Attock Oil Company Limited (AOC), Pakistan Oilfields Limited (POL), Attock Refinery Limited (ARL), Attock Petroleum Limited (APL), Attock Information Technology Services (Pvt) Limited and Attock Cement Pakistan Limited.

The Attock Oil Company was incorporated with limited liability in England on December 01, 1913. The company is principally engaged in exploration, drilling and production of petroleum and related activities in Pakistan. It is a pioneer in the oil sector in Pakistan. Its first oil discovery in Pakistan was made in the Khaur district, Attock, in 1915. The refining operations were started in 1922 at Morgah, near Rawalpindi.

Internationally, Dr Ghaith is engaged in diversified entrepreneurial activities, including hotels, oil exploration, production and refining, manufacturing of petroleum products, chemicals, manufacturing and trading of cement, real estate, etc. He was one of the pioneers of former Bank of Credit and Commerce International (BCCI).