AOGC deposits remaining Rs 12b for NRL acquisition

Staff Report

ISLAMABAD: An authorised representative of the Attock Oil Group of Companies handed over on Saturday a pay order of Rs 12,011,351,703 as the remaining amount of the total offer of Rs 16.415 billion for the acquisition of strategic stake of 51 percent of the shares (33,985,788 shares) and the transfer of management control of the National Refinery Limited (NRL).

Earlier, 25 percent of the total offer of Rs 4,103,783,901 was received by the Privatisation Commission (PC) on June 21 as the first installment in this regard. A formal handing over ceremony will be held in Karachi on July 7. As per the sale agreement the buyer was required to deposit the remaining Rs 12,011,351,703 within 60 days after the issuance of a letter of acceptance.

The Attock Oil Group could have made the final payment of Rs 12.011 billion (adjusted for the Rs 300 million earnest money already submitted by them) by August 6. However, the group had indicated at the time of paying the first installment that it would make the remaining payment during July 2005.

The bidding for the NRL was held on May 31 and the Privatisation Commission (PC) board recommended the offer for the sale of 51 percent (33,985,788 shares) of the equity stake in National Refinery Limited together with the transfer of management control to the Attock Oil Group to the Cabinet Committee on Privatisation (CCOP) which approved the offer on June 7.

The PC engaged the Citigroup Global Markets Limited of UK in April last year to provide financial advisory services for the privatisation of the NRL.

The three pre-qualified bidders - the Attock Oil Group, the Crescent Steel and Allied Products and Shakarganj Mills Limited and the Fauji Foundation Consortium had become eligible for bidding after depositing Rs 300 million each as earnest money on the due date.

The Attock Oil Group submitted the highest bid with an offer of Rs 483 per share and a total bid of Rs 16.415 billion, Crescent Steel and Allied Products and Shakarganj Mills Limited was the second highest bidder with an offer of Rs 260 per share with a total bid of Rs 8. 836 billion while the Fauji Foundation Consortium was the third highest bidder with an offer of Rs 197 per share and a total bid of Rs 6.695 billion.

The PC received 29 EOIs for the NRL while 16 parties submitted their Requests for Statement of Qualification (RSOQs). Among them 11 parties were pre-qualified for conducting due diligence in the data room. Six parties participated in the pre-bid conference while three parties decided to participate in the bidding round.

National Refinery Limited was incorporated in Pakistan on Aug 19, 1963 as a public limited company. The refinery complex comprises two lube refineries, a fuel refinery and a Benzene, Toulene and Xylene plant, located in the Korangi Industrial Area in Karachi. The company’s crude oil processing capacity is about 2.7 million tonnes per year (62,050bpsd) and a range of petroleum products.

The NRL is the only local refinery to produce lube base oils (LBO) and the single largest producer of high quality asphalts. Effectively, NRL has an 80 percent share of the LBO market and 80 percent of the share of the asphalts market. In addition to indigenous blenders, the LBO produced is sold to several MNC marketing companies where it serves as a key component in the production of high-end branded lubricants.

In addition, the company produces other value-added petroleum products such as specialty oils and slack waxes. NRL products adhere to international quality specifications and the company is certified with the OHSAS-18001 and ISO-14001.

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