It’s good to see so many foreign investors eager to invest large amounts into Pakistan.
Govt hopes to earn $1bn from PS privatization
A high-level meeting on Monday reviewed the progress on disinvesting Pakistan Steel Mills Corporation (PSMC) and decided to complete the transaction by March 10 as desired by the president and the prime minister. Minister for Privatization and Investment Dr Abdul Hafeez Sheikh, who presided over the meeting, directed all the stakeholders to expeditiously resolve the remaining issues to meet the deadline for the privatization of the mills, which is expected to fetch $800 million to $I billion. “Although no reference price has been fixed, the government hopes to collect up to $one billion,” a source said, conceding that all the five pre-qualified bidders were more interested in over 19,000 acres of land of the mills rather than the plant itself which needed major revamping. The government has so far, decided to offer roughly 4,500 acres of land attached to the mills to the successful bidder. The minister during the meeting, however, expressed his satisfaction over the progress made so far, for disinvesting the mills. He said that in view of the long term impact of the privatization of PSMC every aspect should be discussed in depth to complete the transaction in a smooth and most transparent manner and to the satisfaction of all the stakeholders and the investors.
The meeting was briefed about the critical issues including the mutation of core land, transfer of non-core land, finalization of services agreement with Al-Tuwairqi Group, and settlement of issues with the CBR etc. The representatives of the ministries of Industries, Production and Special Initiatives, Finance, Law, Justice and Human Rights, CBR, PSMC Chairman, chief executive officer of National Industrial Park and the financial adviser for the transaction, Citigroup Global Markets Limited, attended the meeting. Earlier, five pre-qualified parties participated in the pre-bid conference held on Jan 16, which included Al-Tuwairqi Group of Companies, Kingdom of Saudi Arabia with Arif Habib Group of Companies Pakistan; Government of Ras Al Khaimah (UAE); International Industries Ltd(Pakistan); and Industrial Union of Donbass (Ukraine); Magnitogorsk Iron and Steel Works Open JSC, Russia; and Noor Financial Investment Company, Kuwait. The pre-qualified parties for PSMC have already completed the due diligence of the transaction through plant visits, physical and virtual data room. The PC has offered to qualify strategic Investors interested in acquiring 75 per cent equity stakes in PSMC, together with the management control. According to the PC, Pakistan Steel is the country’s largest and only integrated steel manufacturing plant, with an annual designed production capacity of 1.1 million tons. It was incorporated as a private limited company in 1968 and commenced full-scale commercial operations in 1984. The PSMC complex includes coke oven batteries, a sintering plant, blast furnaces, steel converters, bloom and slab casters, billet mill, hot and cold rolling mills, galvanizing unit and 165 MW of own power generation units, supported by various other ancillary units. It is located 40 km south east of the coastal city of Karachi, in close proximity to Port Bin Qasim, with access to a dedicated jetty, which facilitates import of raw materials. The PSMC manufactures a wide mix of products, which includes both flat and long products. It effectively enjoys a captive domestic market due to the prevalent demand-supply imbalance in the country’s steel industry, where demand has historically exceeded local supply.