Privatisation Commission signs agreement for OGDCL bonds

Karachi: Privatization Commission (PC) has entered into an agreement with the consortium of Citibank, Credit Suisse, J P Morgan and BMA Capital, for the appointment of Financial Advisory for the issuance of OGDC Exchangeable Bonds by monetizing up to 10% of Government of Pakistan shareholding. The Citi consortium had demanded 72 bps commissions in addition to out of pocket expenses and legal fee.

According to Alfalah Securities Limited, however, it was asked to match the offer of Standard Chartered consortium of 51 bps. Later, upon further negotiations, the Citi was awarded a mandate at 17 bps plus USD1.4 mn out of pocket expenses or 45 bps all inclusive (commission plus fee). The deal would generate funds for meeting the financial crunch in system. The ongoing circular debt crisis and tight liquidity position has even restricted the company’s payout ability. OGDC is the largest Exploration & Production Company with Crude oil production of 38,075 bopd and gas production of 976 mmcfd.

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