Islamabad, 17January 2017

PC Board has approved the transaction structure proposed by its Financial Advisors for the restructuring of Pakistan Steel Mills. The decision was taken during the PC Board meeting held today at the Privatisation Commission.

The proposed structure, which is set to be presented to the Cabinet Committee on Privatisation (CCoP) in coming days, includes a tripartite concession agreement between GoP, PSMC and the investor for a period of 30 years on the basis of revenue sharing. PSM’s land will remain with the government while the plant and machinery will be handed over to the new company for a maximum of 30 years. No asset of PSMC will be sold.

The Board members also approved the transaction structure of SME Bank which includes sale of 93.88% shareholding of the Government of Pakistan. Based on the proposed structure, the State Bank of Pakistan is to allow a reduced Minimum Capital Requirement (MCR) of PKR 6 billion on staggered basis over five years, with PKR 2 billion upfront and PKR 1 billion each for next four years. State Bank of Pakistan will also issue a new banking license of a specialized nature with at least 60% advances for SME sector to the investor while also allowing Capital Adequacy Ratio (CAR) at 10% for five years post-privatisation.

Based on the request from Ministry of Information, PC board agreed to delist Shalimar Recording & Broadcasting Co. Ltd from the privatisation program, while it agreed to constitute a committee to evaluate the viability of delisting Sindh Engineering Limited (SE) which has been requested by the Ministry of Industries and Production. The committee will assess the legal status of SE assets and provide a comparative analysis in case of privatisation and restructuring or delisting of the entity.

The Board also approved the initiation of process for hiring of Financial Advisors (FAs) for Pakistan Re-Insurance Co. Ltd and National Insurance Co. Ltd while selecting FAs for Heavy Electrical Complex (HEC).