WASIM IQBAL & ZAHEER ABBASI
ISLAMABAD: Privatization Commission Board has approved the appointment of United Bank Limited and Ernst & Young-led consortium as financial advisers (FAs) to undertake the privatization of Faisalabad Electric Supply Company (FESCO) and Northern Power Generation Company Limited (NPGCL).
The Board has also approved Dubai Islamic Bank-led consortium as financial advisers for strategic privatization of Pakistan International Airlines (PIA). In another case, the board approved KASB as financial advisor for divestment of National Power Construction Corporation (NPCC).
Sources said the meeting of the PC board was held on Tuesday; however, no official statement was issued on the appointment of financial advisor to media. The PC board has given its final approval to appointment of financial advisors on the basis of recommendations of evaluation committee.
An official told Business Recorder that everything was in the hands of the evaluation committee as far as appointments of financial advisors were concerned and the PC Board did not turn down any recommendation made by the evaluation committee.
Spokesman for the PC, when contacted, concurred and stated that the evaluation committee submitted its recommendations to the PC Board on the appointments of financial advisor after evaluating the financial and technical bids of interested bidders. The recommendations of the committee are then discussed in the PC board prior to granting final approval.
As many as five parties were in competition to provide financial services for sell-off of FESCO which included BMA, Consortium of UBL and Ernst & Young, SSJBL and Burj Power, Alma Capital and Grant Thornton. An equal number of bids were also submitted to the board meeting held on Tuesday for a financial advisor of PIA.
Dubai Islamic Bank and its partners IATA consulting, Deloitte, Haidermota, Freshfields Bruskhaus Deringer, Abacus and APCO were given 100 per cent points in both technical and financial bids by evaluation committee of PC. While technical bids of two consortia, led by Rothschild Group and Oliver Wymann and Mckinsy, MCB and Deloitte, were rejected for failing to secure a mandatory 70 percent and their financial proposals were not opened.
For divestment of FESCO, a group led by Ernst & Young, Haidermota BNR, United Bank Limited, Seabury and Excelerate and Freshfield Bruckaus, got 95 percent in technical bid, but ended up with 67.59 percent. The board gave approval on the basis of recommendations by PC’s evaluation committee, sources said.
The spokesman for PC committee told Business Recorder that the evaluation committee of the PC headed by Chairman and Minister of State Muhammad Zubayr was given presentations by potential parties for strategic divestment of 26 per cent shares with management control of PIA and a strategic sale of FESCO. The committee includes two members of the Board, Secretary, Director General and representatives from Ministry of Finance and concerned ministries.
An official of the PC said the criterion for the appointment of a financial advisor is that the Expression of Interest (EOI) is invited twice with a gap of 14 days. He added that transactions meant for international bidders are advertised in international media for appointment of advisor. The advertisements are made available on PC website and displayed on the website of Public Procurement Regulatory Authority (PPRA).
Spokesman further added that all the rules and regulations of PPRA have been fully adhered to during the appointments of Financial Advisors that would assist the PC in divestment of public sector entities.
Chairman PC is head of the evaluation committee and other members of the committee include two members of PC Board, Secretary PC, one representative of Ministry of Finance and the relevant ministry participates in short-listing process.
