Islamabad: In an effort to attract foreign investors and improve the country’s foreign exchange reserves, the government is working on a plan for the strategic sale of shares in profitable state-owned institutions. The institutions under consideration for this “strategic sale” include Oil and Gas Development Company Limited (OGDCL), Pakistan Refinery Limited (PRL), Pakistan Petroleum Limited (PPL), Pakistan State Oil (PSO), Sui Southern Gas, Sui Northern Gas, and others.
Explaining the term “strategic sale,” a well-informed source stated that the government intends to sell 10, 15, or 20 percent of the shares of these institutions to “strategic buyers.”
It is believed that selling 10 to 20 percent of shares in highly profitable institutions to strategic buyers could bring substantial foreign exchange to the country. Unlike regular share prices, a large number of shares can be sold at better rates, which requires the government to assess the value of shares of various state institutions for strategic buyers.
One senior source involved in investment and financial decision-making said, “We are currently doing the groundwork.” The government expects that Pakistan can bring in foreign exchange by strategically selling shares of its profitable institutions. These institutions have been categorized into two tiers (Tier One and Tier Two).
Profitable institutions like OGDCL, PSO, and PPL are being included in the Tier One category.
According to media reports, Saudi Arabia has already offered to buy a 15 percent stake in the Reko Diq mining project and has pledged substantial grants for infrastructure development in the mining sector.
In response to Saudi Arabia’s offer, Pakistan has decided to form a negotiating committee to review the offer and recommend a final price for approval by the federal cabinet. It is said that Saudi Arabia’s Public Investment Fund (PIF) has made the offer through Manara Minerals to purchase a 15 percent stake. The federal government currently holds a 25 percent stake in the Reko Diq mining project and intends to sell 15 percent of its share to Saudi Arabia.
A recent report published in a newspaper stated that in addition to buying a 15 percent stake, Saudi Arabia has also offered a grant for road infrastructure development around the Reko Diq mining project.
The government plans to construct the Mashkhel Panjgur road to ensure smooth movement around the mining area. The report further mentioned that the Ministry of Economic Affairs has raised the matter of the grant with the Saudi Fund for Development (SFD) to finalize the road scheme.
