Pakistan to offer oil, gas stake in biggest sale in 8 years
Pakistan to offer oil, gas stake in biggest sale in 8 years
FASEEH MANGI
KARACHI, Pakistan (Bloomberg) -- 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 program with the International Monetary Fund.
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.”
The sale was delayed after opposition leader Imran Khan and Tahir-ul-Qadri, a cleric, led thousands of protesters in a sit-in outside Parliament that has lasted 40 days. They are demanding Prime Minister Nawaz Sharif resign over allegations of vote rigging in the 2013 general election.
“This will be in the same range as the 2006 record sale,” Mohammad Moazzam Ali, a transaction manager at the Privatization Commission in Islamabad said by phone. Pakistan raised $813 million in a sale of global depositary receipts in Oil & Gas in 2006. The government holds a 75% stake in OGDC.
International Investors
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.
“The investment case for OGDC is compelling,” Muhammad Zubair, the minister of state for privatization, said in a statement Sept. 23. “The support for Pakistan’s on-going privatization programme is a vote of confidence in the country’s growing economy.”
The government also plans to sell shares in Habib Bank Ltd., and Allied Bank Ltd., according to the Privatization Commission.
