ISLAMABAD: Privatisation Commission (PC) has refused to disclose the names of investors who have submitted Letters of Interest (LoIs) to acquire up to 74 shares in Pakistan Steel Mills (PSM).
Last week, PC issued corrigendum titled "invitation for expression of interest-revival of Pakistan Steel Mills for acquisition of 51-74 issued share capital together with management control of Steel Corps (Pvt.) Ltd, wholly owned subsidiary of Pakistan Steel Mills Corp (Pvt.) Ltd".
The Corrigendum says that the date of submission of EoI for revival of PSM has been extended to October 15, 2021 and the date for submission of Statement of Qualification has been extended to October 29, 2021. Rest of the terms and conditions shall remain the same.
When contacted, PC spokesperson stated that date of EoI and SoQs have been extended on the request of some investors. To a question, the spokesperson said that four parties have submitted EoIs. However, when requested to share the names of investors who have submitted EoIs, she refused, saying that names are not to be disclosed till pre-qualification.
When contacted, Chairman PSM Board, Aamir Mumtaz said that he is not aware how many consortiums have formally submitted EoIs.
PSM plan hamstrung by investor concerns over future litigation
The Government has approved the PSM revival plan in the following manner: (i) quantum of range of equity stakes of new subsidiary namely Steel Corp. (Pvt) Ltd shall be 51-74% for divestment through bidding process; (ii) Steel Corp. (Pvt) Ltd. shall be owned by Government of Pakistan (Ministry of Industries and Production); (iii) the paid-up capital of Steel Corp. (Pvt) Ltd. shall be equal to its Net Equity as on December 31,2020; (iv) the effective date of SoA shall be January 01, 2021; (v) the existing utility connections (electricity and gas) and power generation license shall be transferred to Steel Corp. (Pvt) Ltd, unencumbered. Petroleum Division/SSGC shall confirm in writing that the gas supply to Steel Corp. (Pvt) Ltd shall be RLNG or otherwise. The PSMC shall install a new dedicated meter of fresh water for Steel Corp. (Pvt) Ltd; (vi) the use of Jetty (including any expansion/extension and conveyor belt system, including any expansion /extension thereof) shall be available to Steel Corp. (Pvt) Ltd on arms-length basis. The draft jetty-related Agreement including the commercial terms and conditions shall be made available to the pre-qualified bidders as part of bidding documents for their review and comments. The agreement shall be finalized prior to the bidding process between the PSMC and PQA;(vii) total land of 1229 acres shall be leased by PSMC to the Steel Corp (Pvt) Ltd. through the land lease deed on arms-length basis. The draft land Lease deed including the commercial terms and conditions shall be made available to the pre-qualified bidders as part of bidding documents for their review and comments. The land lease deed shall be finalized prior to the bidding process. The Core Operating Assets (COA) approved by the PSMC Board of Directors (BoD) in its meeting held on July 13, 2021 shall be transferred to Steel Corp. (Pvt) Ltd.
However, the Mol&P/PSMC shall ensure reconciliation of COA and corresponding Fair Market Valuation (FMV) for transfer of COA to new subsidiary as per audited financial statements of PSMC for the period ending December 31, 2020). Petroleum and Finance Divisions will hold meetings with relevant stakeholders for resolution and settlement of SSGCL payables subject to issuance of Letter of Comfort (LC) by Finance Division. SSGCL shall withdraw litigation/ stay order against PSMC.
It was also directed that NBP shall issue requisite NOC to facilitate transfer of COA to Steel Corp. (Pvt) Ltd. Mol&P/PSMC shall ensure fulfilment of all the corporate actions/regulatory requirements for the approval of SOA for efficient and successful completion of this important transaction; and (xi) Privatisation Commission to invite the Expression of Interest from interested parties for revival of PSMC, after filing of SOA with SECP by PSMC.