KARACHI (INP): Pakistan’s government will offer 10% of its shares in Oil & Gas Development Co., the biggest sale in eight years, to meet targets as part of a loan programme with the IMF.
Muhammad Zubair, the minister of state for privatization has said that government also plans to sell shares in Habib Bank Ltd., and Allied Bank Ltd., according to the Privatization Commission.
“The investment case for OGDC is compelling,” Muhammad Zubair, the minister of state for privatization, said in a statement on Tuesday. “The support for Pakistan’s on-going privatization programme is a vote of confidence in the country’s growing economy.”
The sale of 322.5 million shares, or a 7.5% stake in the company, will take place “on or around Oct. 2,” according to a regulatory filing Sept. 23. The sale is valued at 85 billion rupees ($824 million) as of the price at 11:47 a.m. local time in Karachi.
Pakistan is seeking to raise funds to meet conditions attached to a $6.6 billion IMF loan. The sale comes after the Privatization Commission, the asset-sale agency, sold shares in Pakistan Petroleum Ltd., the second-biggest fuel explorer in June and raised $387 million from a share sale in United Bank Ltd., the same month.
“The response to the OGDC sale will be good and Pakistan is still favorable,” Nauman Khan, research head at Foundation Securities Ltd. said by phone from Karachi. “There will not be much problem despite the delay in the sale due to political uncertainty.”
“This will be in the same range as the 2006 record sale,” Mohammad Moazzam Ali, a transaction manager at the Privatization Commission in Islamabad told. Pakistan raised $813 million in a sale of global depositary receipts in Oil & Gas in 2006. The government holds a 75% stake in OGDC.
The offer includes sale to international institutional investors in the form of shares and global depositary shares and domestic sale to public and large investors.
Oil & Gas Development’s net income rose 36% to 123.9 billion rupees in the year ended June 30, according to an exchange filing. Shares have declined 5.5% this year compared with a 19% gain in the benchmark KSE100 index, according to data compiled by Bloomberg.
