MUSHTAQ GHUMMAN

ISLAMABAD: Privatisation Commission (PC) of Pakistan has sold Heavy Electrical Complex (HEC) to a Kenya–based company, M/s Cargill Holdings Limited, for Rs1.348 billion, it emerged on Saturday.

Dr Robert L. Walker, Chief of Party USAID/Pakistan Support for Privatisation oversaw the transaction process, sources told Business Recorder.

The strategic sale of the HEC was approved by the Cabinet Committee on Privatisation (CCoP), last month, after investigating the documents submitted by the bidder. The CCoP was headed by Finance Minister Senator Ishaq Dar.

The sale was agreed on the following terms and conditions: (i) all regular employees, numbering 26, will be retained by Cargill Holdings, Kenya; (ii) gratuity and provident fund, amounting to around Rs50 million, for the regular employees to be paid by Cargill Holdings; (iii) no tax credits to be claimed in favour of HEC (nearly Rs190m); (iv) a bank’s liability of Rs858m would be upon Cargill Holdings, Kenya; and (iv) additional Rs250m will be paid in cash to close the deal of 97 per cent shares of HEC.

Though the government had short-listed three companies, only one company paid the earnest amount of Rs25m within time for the deal. The two other companies M/s Elahi Electronics & M/s FFC did not show further interest in acquiring HEC by not paying earnest money, thereby leaving M/s Cargill Holdings Limited, a Kenya-based company for negotiated sale of HEC.

A representative of M/s Cargill Holdings Limited told Business Recorder that the company believes that HEC has been acquired on a higher price as per their expectation as there are many unseen liabilities of the company which are yet to be investigated within the organisation.

According to him, a price of Rs1.348 billion seems too much for what it produces, adding that there is one product and one customer for this particular product.

He argued that that M/s Cargil Holdings did not understand why the HEC was in huge arrears for many years.

To a question, he added that M/s Cargil plans to increase the range of products, export of products to foreign targeted markets, especially in Africa, Middle-East and South Australian region. This would not only help develop Pakistan’s economy, but would also create jobs for locals and engineers to be provided strictly on merit basis. Another representative of M/s Cargil said that his company was also planning to enhance salary of the present staff and provide them other facilities such as medical, clinic within the premises, free tea and food, housing and, of course, safety rules.