Daily Times

KARACHI: The Privatisation Commission (PC) has invited expressions of interest (EoIs) for appointment of Financial Advisory Consortium (FAC) for divestment of government of Pakistan held shares in Mari Petroleum Company Limited (MPCL).

MPCL is a fully integrated Exploration and Production (E&P) company of Pakistan, currently managing and operating the country’s largest gas reservoir (in terms of current reserves) at Mari Field, District Ghotki, Sindh.

Fauji Foundation holds 40 percent of the shareholding in MPCL along with management rights, while the government of Pakistan, Oil and Gas Development Company Limited (OGDCL) and general public hold 18.39 percent, 20 percent and 21.61 percent of the shareholding, respectively. The shares of MPCL are quoted on the Pakistan Stock Exchange (PSX).

Fauji Foundation and OGDCL had refused to buy government of Pakistan’s stake in MPCL at a price approved by the Cabinet Committee on Privatisation (CCoP). The CCoP had approved the transfer price for selling 18.3 percent stake at a 5 percent discount to the closing stock price on the day prior to which the transfer notice had been served to the joint-venture partners. The stock stood at Rs1, 427 that day, meaning that the transfer price would be Rs1, 355 per share. However, the joint venture partners were of the view that the government had overpriced its share. It is expected that at the stock price of Rs1, 355, the government will fetch a minimum Rs 25 billion.

Meanwhile, government of Pakistan through the PC intends to divest up to 18.39 percent of its shareholding in MPCL to the foreign and domestic institutional investors, high net worth individuals and/or general public through Secondary Public Offering (SPO) at the PSX. In this regard, PC invites technical and financial proposals from interested parties comprising of not more than three (03) members, including a global coordinator, a consultant to the issue and a book runner to act as FAC for the Transaction.

According to PC, FAC will be expected to advise PC on all matters relating to the transaction and government of Pakistan will determine the transaction structure, size and divestment strategy on the recommendations of FAC based on the market conditions and with the objective to maximize value extraction for government of Pakistan.

Interested parties are advised to submit EOI as soon as possible, as the last date for the submission of the technical & financial proposals is 25th September, 2017.

Published in Daily Times, August 31^st 2017.