ISLAMABAD: The government has decided to resume the process of privatisation and divest up to 18.39 per cent of its shareholding in Mari Petroleum Company Limited (MPCL).

The shares will be offered to the foreign and domestic institutional investors, high net worth individuals and general public through secondary public offering at the Pakistan Stock Exchange.

In this regard, the Privatisation Commission has decided to appoint a financial advisory consortium for divestment of government share in MPCL.

Inviting technical and financial proposals, the commission says the proposals from interested parties to be submitted by September 25, should comprise not more than three members including a global coordinator, a consultant to the issue and the book runner for the transaction.

The financial advisory consortium will be expected to advice the commission on all matters relating the transaction and the government will determine the transaction structure, size and divestment strategy on the recommendations of the consortium for the transaction.

Mari Petroleum is a fully integrated exploration and production company of the country, currently managing and operating the country’s largest gas reservoir at Mari field in Ghotki district of Sindh.

Fauji Foundation holds 40 per cent of the shareholding in MPCL along with management rights, while the government, OGDCL and general public holds 18.39 per cent, 20 per cent and 21.6 per cent of the shareholding, respectively. The shares of MPCL are quoted on the Pakistan Stock Exchange.

As per rule, financial advisers are appointed by the commission to advise on each transaction. Advisers are a consortium of leading and credible investment banks, chartered accountant firms, legal firms, technical advisers and HR consultant groups.

The current privatisation programme includes transactions in the banking and finance, oil and gas, power, and other sectors.

The PMLN government has completed five transactions so far from June 2013, amounting to Rs648.6 billion. The transactions — UBL, PPL, ABL, HBL and NPCC — raised gross proceeds of Rs172.9bn, including over $1.1bn in foreign exchange.

A fact sheet prepared by the Privatisation Commission says it has generated savings of $6.79 million (equivalent to Rs690m) in financial advisory services contracts.

There are currently 18 transactions on the agenda of the Privatisation Commission inclu­ding Pakistan International Airlines (PIA), Pakistan Steel Mills, power sector entities, State Life Insurance and SME Bank.

For PIA and Pakistan Railways, the government’s strategy is to turn around the companies before considering privatisation. Similarly, the privatisation of airports, seaports, insurance companies, and shipping have all been studied or proposed at some point.

Published in Dawn, September 1st, 2017