Govt prefers G2G transactions of 8 Top state-owned companies to Friendly Countries
The cabinet has decided to introduce the government to the government (G2G) Commercial Transactions Ordinance to sell 10 per cent of state-owned companies to friendly countries.
The companies included OGDCL, PPL, Mari Gas, PSO, SSGC, SNGPL, PTCL and PIA.
Sources said that no one would be able to challenge the sale of 10 per cent shares in these state companies to friendly countries.
Cabinet had Okayed in-principle approval to bring Ordinance in this regard.
Pakistani companies win offshore block in UAE
The cabinet division informed Prime Minister Shahbaz Sharif and cabinet members in a recent meeting that the government had formed a sub-committee on Privatization.
The cabinet is a meeting held on April 4, 2022, had taken a decision to form a committee to draft an ordinance for government-to-government (G2G) transactions of state-owned companies.
The majority of the companies are from the oil and gas sectors.
The cabinet division had submitted a report in a recent meeting of the cabinet and informed that the cabinet body had held a meeting on July 13.
Minister for the defence had chaired a meeting.
The Sub-committee had prepared a draft ordinance for government-to-government (G2) transactions in consultation with the Ministry of Law and Justice.
Cabinet Okays G2G transaction Ordinance
It sought in-principle approval of the cabinet to place the draft of the Ordinance before the cabinet committee for disposal of Legislative cases (CCLC).
The cabinet Okayed placing a draft ordinance before the cabinet committee for disposal of legislative cases.
Officials said that Pakistan oil and gas companies were facing the gigantic issue of circular debt. Therefore, it will also create hurdles to fetching good prices for companies’ shares.
United Arab Emirates (UAE) is said to take a lead in the race of buying shares as it had made already a footprint in Pakistan.
UAE was a shareholder in Pak Arab Refinery Limited (Parco) and PTCL.
However, UAE and Pakistani governments had a chronic dispute regarding the payment of dues by Etisalat.
Pakistan claimed to recover $800 million from Etisalat. However, the UAE firm was reluctant and had not paid Pakistan.
Qatar and Saudi Arabia could also join a race of buying stakes in state-owned companies.
Qatar had already shown interest to buy LNG-based power plants in Pakistan. It had been the largest LNG supplier to Pakistan and had also shown interest to build an LNG terminal in Pakistan.
Qatar was also developing a strategic relationship with Pakistan.
Saudi Arabia had also been working with Pakistan for decades. It had also shown interest in setting up an LNG terminal in Pakistan and wanted to make footprints in the LNG market.
Therefore, three friendly countries—UAE, Qatar, and Saudi Arabia—will bet on buying stakes in Pakistani state-owned companies.
The government had planned to sell shares of the country’s largest oil and gas companies to friendly countries to generate funds to avoid default on the balance of payments.
The coalition government faced a problem with the balance of payments soon after it comes into power by ousting the Imran Khan government.
It had been struggling to secure bailout packages from friendly countries like Saudi Arabia and China.
China had also rolled out loans in order to save Pakistan from default.
