Refinancing to replace govt equity, loan in NPPMCL to take 3 months

ISLAMABAD: After National Power Parks Management Company Limited’s (NPPMCL) go-ahead for privatising two state-run RLNG-based power plants, government aims to fast-track the process of replacing its excess equity and loan through borrowing from local banks, officials said on Wednesday.

This process of refinancing will take about three months based on the response from the banks, officials, carrying out the process, informed the Federal Minister for Privatisation Mohammedmian Soomro here in a review meeting regarding ongoing privatisation programme.

They also said that in the meantime, the Ministry of Privatisation had also initiated the process for sale of equity portion of NPPMCL and the process would run parallel to the debt-refinancing.

It is to be noted that following the approval of Cabinet Committee On Privatisation (CCoP), the company’s management was furnished with draft expression of interest (EOI) and Request for Proposal (RFP) for approval. The NPPMCL Board, in its meeting held on January 17, accorded approval for proceeding further.

NPPMCL was formed with an objective to reduce the electricity/power demand-supply gap in Pakistan. Two power plants including Haveli Bahadur Shah and Balloki are operating under this company. The government is now considering divesting up to 100 percent of its shareholding in NPPMCL to a potential investor, along with management control.

For the sale of remaining federal properties, the government has signed Financial Advisory Services Agreement (FASA) terms with M/s HLB ljaz Tabassum & Co on December 28, 2021.

The meeting was briefed that the EOIs for House Building Finance Company Ltd (HBFCL) had been published and some parties had indicated intention for submitting EOIs; however, the deadline would end on January 31 and the privatisation process was likely to be completed in June this year.

The updated matter relating to the Heavy Electrical Complex (HEC) would be placed before the upcoming Privatisation Board meeting, according to the statement.

The PC Board would also consider the pre-qualification of investors for Pakistan Steel Mills, officials informed the meeting, adding that the buyers’ side due diligence and opening of Virtual Data Room (VDR) would take place after the approval of pre-qualification.

For proceeding with the privatisation of Sindh Engineering Limited (SEL), the board was told that there were certain prior actions to be completed by the Ministry of Industries and Production, including constitution of SEL board, valuation of assets, latest financials and other matters related to the land. The Privatisation Board has already approved the hiring of financial advisers for the transaction of SEL.

Regarding Jinnah Convention Center, the meeting was informed that there were issues that needed to be resolved by the stakeholders.

The minister urged the Privatisation Commission team to proactively expedite all actions hindering the transaction of JCC.

Soomro, later, also chaired a meeting to review the process of audit of First Women Bank Limited (FWBL), as audits of FWBL were pending since 2018. The meeting was attended by financial advisers, CEO FWBL, audit firms Chairman BoD FWBL. The meeting was apprised that the audit of FWBL for the year 2018 had already been started by KPMG and could be completed in March 2022.

The privatisation team briefed the participants that the necessary approval for the appointment of audit firms and early completion of the same had already been green-signaled by the Federal Cabinet.

Privatisation minister asked the CEO and Chairman BoD FWBL for the appointment of the auditing firms for FY2019-2021 at the earliest and added that “we shall work as a team to finish the audit in a minimum possible time to meet the privatisation deadline”.