Following a successful return to the world capital market last year and stimulated by positive response to sale of state-owned assets, Pakistan’s government plans to offer its stakes in Mari Petroleum and Pak Arab Refinery Limited by end-2015.
The South Asia’s second-biggest economy also plan to sell the country’s largest life insurance corporation – State Life Insurance -, along with stakes in other state owned entities such as the national flag carrier PIA, Pakistan Steel Mills and power generation and distribution companies.
The sale of shares of Mari Petroleum Limited will be finalized by September this year, Finance Minister Ishaq Dar said in a letter to the International Monetary Fund released to the media on July 2. Pakistan is undertaking privatization of state assets under an IMF program which bailed out the country in 2013 with $6.6 billion loan to stave off an imminent balance of payment crisis.
The government holds 18.39 percent shares in Mari Petroleum which has an authorized share capital of nearly $25 million. State-run OGDCL has 20 percent stake in the company.
The government also plans to sell by December its 60 percent shares in the Pak-Arab Refinery Limited (PARCO), a joint venture between Pakistan and the UAE government which has an asset base of over $151 million.
After the gap of nearly seven years, Pakistan returned to the global capital market in April last year with the sale of $2 billion in sovereign bonds against an offer of $7 billion from global investors, several of them based in the U.S.
Since then, the government has sold shares in Pakistan Petroleum Limited (PPL), the country’s major natural gas supplier and three banks, including the Habib Bank Limited in April this year which raised $1.02 billion, the biggest so far in the country’s divestment plans.
The privatization and divestitures plans are the main planks of the economic policies of the government of Prime Minister Nawaz Sharif which inherited a fragile economy when it took over the helm after winning the 2013 general elections.
With the help of the IMF, the government has been able to stem the slide and the sale of state assets has helped revive the $232 billion economy and boost the country’s foreign reserves to an all-time high of over $18 billion.
The government is also working on plans to sell or offload shares in major public sector units including PIA, PSM, Heavy Electric Complex and several power generation and distribution companies in the current financial year that began July 1.