Islamabad August 10 2021: A pre-bid meeting for privatization of heavy electrical Complex was held today in Privatisation Commission under the chairmanship of Federal Minister for Privatization Mohammedmian Soomro (via Zoom).
It is expected that privatization of HEC will boost the investors’ confidence in the transparency of privatization program. This will also create conducive environment for upcoming larger size privatizations including Guddu Power Plant, RNLG plants and will also boost private sector participation; planned in DISCOs.
The meeting was attended by senior officials of PC, Financial Advisors and HEC representatives and pre-qualified bidders. The meeting is held in the backdrop of forthcoming bidding for privatisation of HEC, the officials from PC and Financial Advisors Consortium responded to the queries of the pre-qualified bidder.
The queries were mainly regarding instructions to bidders document (ITB) and Share Purchase Agreement (SPA) regarding the privatisation of HEC. Moreover, the data/ information for buyers’ side due diligence has been uploaded since last 3 months on Virtual Data Room (VDR) and information for the potential investors has been uploaded after proper verification. In the meeting, briefing was given to the bidders on the bidding process and Share Purchase Agreement. During the meeting questions were related to technical, financial, HR and legal aspects of entity being privatized.
The questions were addressed by the concerned Director General, Transaction Manager and FA consortium and legal consultants. On few pending matters the bidders were assured that these matters are being closely followed with Ministry of Industries & Production (MOIP) being the administrative ministry of HEC. It is expected those will be resolved very shortly. Privatization is a very complex process involving various steps including the seller and buyer due diligence, evaluation and valuations. The entities being privatized are often loss-making and have various encumbrances attached which have to be removed to enable the completion of privatization process. It is pertinent to highlight that the whole process took almost 1.5 years for PC to bring this entity at this stage pre-bid meeting after addressing various encumbrances related to employees, land, DISCOS and KPEZDMC.
The pre- bidding meeting will now be followed by the submission of reserved price for final bidding by the FA Consortium; which will be considered /recommended by PC Board for final approval of CCoP and Federal Cabinet respectively. In the end Federal Minister reiterated that all the legal/plausible concerns of the bidders will be addressed in collaboration with line-Ministries/Divisions to ensure smooth and earliest bidding.