Islamabad, January 19, 2018 (PPI-OT):Federal Minister for Privatisation, Mr. Daniyal Aziz held a meeting today with representatives from China Investment Bank, Financial Advisors of Pakistan Steel Mills (PSM) privatisation. The meeting is a series of meetings held by the Federal Minister to proceed with PSMC transaction. The Minister reviewed the proposed transaction in detail and also discussed proposed key components of PSM’s liability settlement plan to ensure that all liabilities of PSM workers and other stakeholders are addressed.
Two models were discussed which include zero coupon bonds. Minister Aziz further recommended that the FA should develop a plan in which the liabilities of PSMC should be settled over a period by devising a payment plan supported with an effective cash flow model. The Financial Advisors agreed to review the additional payment and financial options. Concluding the meeting, Minister Daniyal Aziz directed the FAs to update all data on PSM and prepare the liability settlement plan on priority.
He also directed the FA team to prepare a five to seven year revenue plan as part of the transaction structure to ensure the financial viability of PSM. He also directed the FAs to settle their outstanding payments with PC and to move ahead with the transactional work, directing them to complete the work within four months. The PC Board approved a thirty-year transaction structure proposed by the financial advisors for the restructuring of Pakistan Steel Mills (PSM) in January 2017.
The proposed structure includes a tripartite concession agreement between the government, PSMC and the investor for a period of 30 years on the basis of revenue sharing. According to the structure plan, PSM’s land will remain with the government while the plant and machinery will be leased, invested and then transferred back to Government for a maximum period of 30 years, while no asset of PSMC will be sold.
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