ISLAMABAD: A cabinet body has okayed strategic sale of 97 percent shares of Heavy Electrical Complex (HEC) to Cargill Holdings Ltd. for Rs905 million.
Cargill Holdings Ltd.’s offer assumes liabilities of Rs435 million, Rs.250 million in cash ‘up front’ and, in addition, another Rs.30 million to cover employee gratuity and provident fund obligations. Finally, Cargill will forego tax benefits associated with five years of losses amounting to Rs.190 million.
Briefing the CCoP, Privatization Commission (PC) Chairman Mohammad Zubair said, “The net to the Government of Pakistan is Rs. 905 million.” Zubair added that in three previous attempts agreement with a qualified investor had not been possible.
Four investors in 2006-07 initially expressed interest, two interested parties pre-qualified, but neither put up ‘earnest money.’ In 2011-12, four parties expressed interest, however, none met pre-qualification criteria apart from one which failed to deposit the earnest money after conducting due diligence.
Zubair said, “The earlier failed attempts to privatize the company is a statement of HEC’s poor condition. We are pleased to have a qualified buyer of Cargill’s calibre and have agreed to such favourable terms.”
