Proposals for OGDCL bonds due in cabinet next week

ISLAMABAD: The proposals from world’s top investment groups along with the market assessment for issuance of Oil and Gas Development Company Limited (OGDCL)’s bonds, would be tabled in the Cabinet in next few weeks, Geo News reported Monday.

These proposals will be tabled before the Cabinet Committee on Privatisation (CCoP) in the upcoming meeting next week, in accordance with the Privatisation Commission (PC) Ordinance 2000 under section 25.

The PC board in its meeting on March 18, 2010 attended by the representatives of Ministries of Finance and Petroleum and Natural Resources approved to obtain proposals and detailed market assessment for submission to CCoP to proceed further. Citibank, J P Morgan, Nomura Investment Inc; UK, Barclays Bank, Morgan Stanley, Goldman Sachs, Credit Suisse, Merrill lynch and others had also made presentations before the PC board including their top management through electronic mode. All these financial institutions have been asked for their respective proposals and reports. A summary in this regard has been sent to the prime minister.

The PC intends to appoint a book-running consortium for divestment of equity of OGDCL via a $500 million exchangeable bond with an upside option of $100 million with no sovereign resource. The groups have been asked to submit their separate sealed technical and financial proposals free of cost, indicating their relevant experience, competence of team, work plan, methodology and presentations with hard underwriting and coupon services.

The OGDCL bonds activity will build a diversified and high quality international investor base and would also improve standing of domestic capital markets through increased foreign institutional investors and foreign direct investment flows.

On March 25, 2010, the top management of OGDCL held a meeting with the minister for privatisation and expressed their full support for the completion of the transaction, which would help OGDCL to speed up their exploration activity. The minister assured the management to take forward the transaction on fast-track basis keeping in view the keen interest being shown by the market players.

Source: http://www.geo.tv/Business.htm