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Gas industry

Pakistan Aims to Raise $2 Billion from Government Holdings

Strategic Insights

— 1 min read

Pakistan plans to raise up to $2 billion from holdings in its largest banks and energy companies, as well as from Oil & Gas Development Co. exchangeable bonds, according to Privatisation Minister Naveed Qamar. The move is aimed at reducing the country's budget deficit, which is forecast to widen to 8 percent of gross domestic product in the year ending June 30. The government will offer shares in National Bank of Pakistan, Habib Bank Ltd., Pakistan Petroleum Ltd., and Kot Addu Power Co. to local investors, while OGDC will market equity-linked bonds internationally.

Key Takeaways:

  • Pakistan aims to raise up to $2 billion from government holdings, including banks and energy companies, as well as $1 billion from share sales.
  • The government will offer shares in National Bank of Pakistan, Habib Bank Ltd., Pakistan Petroleum Ltd., and Kot Addu Power Co. to local investors.
  • OGDC will market equity-linked bonds internationally, with proceeds used to cut the budget deficit.
  • Pakistan's new ministers are trying to revive a $167 billion economy battered by militant attacks and the nation's worst monsoon flooding.
  • Emirates Telecommunications Corp. will pay Pakistan $800 million under a deal to acquire a stake in Pakistan Telecommunication Co.
  • Pakistan may end a five-month freeze on domestic fuel prices as oil surged to the highest in almost 30 months.
  • The government has lost 13.5 billion rupees ($160 million) in duty revenue from December to February by keeping fuel prices unchanged.

Statistics:

  • Budget deficit forecast: 8 percent of gross domestic product in the year ending June 30.
  • Share sales: Pakistan aims to raise a further $1 billion from share sales, some of which will be completed in the current fiscal year that ends in June.
  • OGDC stock: Shares in OGDC rose by 34 percent in the past 12 months.
  • Karachi Stock Exchange index: Benchmark index rose by 17 percent in the past 12 months.
  • Oil price surge: Oil prices surged to the highest in almost 30 months after Libyas violent uprising cut supplies.
  • Government revenue loss: 13.5 billion rupees ($160 million) in duty revenue lost from December to February by keeping fuel prices unchanged.

Sources:

  • Balochistan Times (February 26, 2011)
  • Privatisation Minister Naveed Qamar interviewed by Bloomberg
  • Ministry of Finance, Government of Pakistan
  • Emirates Telecommunications Corp. press release
  • Pakistan Telecommunication Co. press release
  • Karachi Stock Exchange (KSE) data
  • OGDC annual report
  • Pakistani government documents

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