The Cabinet Committee on Privatisation (CCoP) on Friday approved secondary public offering (SPO) of 70.05 million shares from the government held equity in Pakistan Petroleum Limited (PPL). The Privatisation Commission (PC) conveyed the information to PPL, stating that the offer would be open to both international and domestic institutional investors and high net worth individuals (HNWI) through a book building process, to be executed in the last week of this month. PPL in an announcement said: "The PC has further advised that the CCoP has approved offering of 7m shares to the general public with preference to existing employees of PPL through a subsequent subscription process within next few months."
A person in the know of things said that the government hopes to realise Rs15 billion from the sale of 70.05m shares. The PPL transaction comes quickly on the heels of the mid-June sale of 19.8 per cent shares of government holding in United Bank Limited (UBL) also through the book building process.
The UBL deal was struck at $387m, of which 80pc shares on offer went to foreign investors, which were thought to have fetched the government around $310m. "The proceeds have already been realised and entered the government kitty on Friday, which should reflect in the State Bank of Pakistan's foreign exchange reserve numbers on Saturday," said a senior banker. The PC had vowed to complete the privatisation transactions of UBL, PPL and OGDC before the end of this month.
An analyst noted that Finance Minister Ishaq Dar was emboldened by the considerable interest in the UBL transaction by both the domestic and foreign buyers as the offering was oversubscribed by almost two times.
More than 40 leading global equity funds, including Templeton, Wellington, Everest, Lazard, Morgan Stanley, Blackrock and others, participated in the UBL sale deal.
"The total demand received from the domestic investors was Rs12.3bn, which was one of the highest in terms of domestic demand in Pakistan's capital market history," the PC claimed. The person privy to the upcoming PPL SPO revealed that the book building process would take place next Thursday and Friday; the PC board would set the 'floor' or minimum price per share on Wednesday which would be considered and approved by the CCoP on Saturday and the deal would close on Monday next.