Islamic Republic of Pakistan Announces Launch of Secondary Offering of Shares in the form of Shares and GDSs in OGDCL
The Privatisation Commission of the Islamic Republic of Pakistan today announced that it expects to launch a secondary offering of ordinary shares (“Shares”) and Global Depositary Shares (“GDSs” and together with the Shares, the “Securities”) in Pakistan’s Oil and Gas Development Company Limited (“OGDCL”) on or around the 2 October 2014 (the “Offer”).
· The Offer will represent up to 10% of the Government of Pakistan’s shareholding in OGDCL, comprising up to 322,460,900 Shares, which corresponds to c. 7.5% of the total share capital of OGDCL. Based on the closing share price of OGDCL shares on the 22 September 2014, this would be valued at approximately PKR 83,891 million / US$816 million.
· The Offer consists of (a) an international institutional offering (the “International Institutional Offer”), in the form of Shares and GDSs, to international institutional investors, including: (i) to Qualified Institutional Buyers in the United States (“US”), as defined in and in reliance on Rule 144A of the U.S Securities Act of 1993, as amended (the “Securities Act”); and (ii) outside the US, to certain persons in offshore transactions under Regulation S of the Securities Act, (b) a domestic institutional offering (the “Domestic Institutional Offer”) of Shares to institutional and high net worth individual investors; and (c) a domestic public offering (the “Domestic Public Offer”) of Shares to the general public, including a portion reserved for OGDCL employees.
· The Shares are listed and traded on the Karachi Stock Exchange, Lahore Stock Exchange and the Islamabad Stock Exchange under the symbol “OGDC”.
· The GDSs are listed on the London Stock Exchange, with each GDS representing 10 Shares under the symbol “OGDC”.
· The price for the Shares and GDSs offered in the International Institutional Offer will be fixed following a bookbuilding process, with the price and allocations for the Shares and GDSs announced on or around the 16 October 2014. The first day of unconditional trading for the GDSs on the London Stock Exchange is expected to occur on or around the 21 October 2014.
· The Domestic Institutional Offer will occur concurrent to the International Institutional Offer. However, the Domestic Public Offer will take place after the closing of the International Institutional Offer at a price guided by the final International Institutional Offer price, or at a discount to be approved by the Cabinet Committee on Privatisation of Government of Pakistan.
· All of the net proceeds from the Offer will be received by the Islamic Republic of Pakistan, the selling shareholder.
· Citigroup Global Markets Limited (“Citi”) and Merrill Lynch International (“BofAML”) are Joint Global Coordinators and International Bookrunners, and KASB Bank Limited (in conjunction with KASB Securities Limited) (“KASB”) are domestic Lead Manager and Bookrunner on the transaction.
· The Islamic Republic of Pakistan and OGDCL will be subject to a lock-up period of 180 days, subject to waiver by BofAML, Citi and KASB.
While launching the transaction, Mohammad Zubair, Minister of State for Privatisation, said
“We believe the investment case for OGDCL is compelling. It is a high quality asset that boasts a long track record of outperformance and delivery of shareholder value.
“OGDCL is the third divestment that Pakistan has brought to market this year, following the successful offers of PPL and UBL, which were both well received by investors.
“The support for Pakistan’s on-going privatisation programme is a vote of confidence in the country’s growing economy. Just last month, the International Monetary Fund raised its GDP growth estimates for Pakistan to 4.3% for fiscal year 2015.
“The growth in the Pakistan economy is underpinned by a young and dynamic population that is powering the success of companies like OGDCL into the future. These are exciting times for Pakistan and its people, who are directly benefiting from the sale of stakes in companies like OGDCL. ”
Mr Muhammad Rafi, Managing Director and Chief Executive Officer of OGDCL, said:
“It has been 11 years since we launched the initial offer for shares in OGDCL. During this time, we have successfully pursued our exploration and development programme and steadily increased our production, while rewarding our shareholders with attractive returns and on-going value creation.
“OGDCL is the largest upstream player in Pakistan and we believe that the company is well placed to take advantage of new opportunities in the market which will further cement our leadership position.
“In our 2014 fiscal year, we added 29 new exploration licenses and completed eight exploration and appraisal wells. In 2015, we expect to continue to increase our production to enable us to respond to growing domestic energy demand in Pakistan, which currently imports nearly one third of its domestic energy requirements.”