ISLAMABAD - The Privatisation Commission’s board of directors on Wednesday approved privatisation of three public-sector entities, including disinvesting 26 percent shares of Pakistan International Airlines (PIA), to a strategic investor and initiation of the process for hiring of financial advisers in this regard.
Chairman/Minister of State for Privatisation Commission Muhammad Zubair chaired the first meeting of the board. The board also approved privatisation of two other entities, National Power Construction Company (NPCC) and Heavy Electrical Complex. “The Privatisation Commission’s board has directed initiation of the process of both the entities, NPCC and HEC,” said an official statement issued here.
The government has planned to disinvest 26 percent shares of Pakistan International Airlines (PIA) to a strategic investor by December 2014.
Meanwhile, the government would hire financial advisers by end-March 2014 to seek potential strategic private-sector participation in the company. Sources said the board meeting of Privatisation Commission would also be held today (Thursday) to consider privatisation of Pakistan Petroleum Limited (PPL) Oil and Gas Development Company Limited (OGDCL) and others on the second day of its meeting.
It is worth mentioning here that the government, under an agreement with International Monetary Fund (IMF), had decided to privatise 31 loss-making public-sector entities (PSEs) in the first stage. Later, other 34 PSEs would also be privatised. The government wants to save Rs 500 billion annually wasted in the loss-making public-sector entities.
Pakistan has assured the IMF of appointing financial advisers by March 2014 for the privatisation of PIA and Pakistan Steel Mills.
In letter of intent (LoI) to the IMF, Pakistan said, “The government will hire financial advisers by end-March 2014 to seek potential strategic private-sector participation in the company as it plans to privatise 26 percent of PIA’s shares to strategic investors by end-December 2014 (structural benchmark). In the meantime, PIA will continue leasing more efficient airplanes and rationalising routes.”
As far as Pakistan Steel Mills is concerned, the government said, “We have appointed a professional board and will hire financial advisers by end-March 2014 to prepare a comprehensive restructuring plan and seek potential strategic private-sector participation in the company.”