Pakistan Approves Transaction Structure for PSM Privatization
Pakistani media reported that Pakistan’s Cabinet Committee on Privatization has approved the Transaction Structure for Pakistan Steel Mills Corporation. The approved structure for Pakistan Steel Mills will allow for, Transfer of identified core operating assets into a wholly owned subsidiary of PSMC through Scheme of Arrangement, as provided in the Companies Act 2017, followed by the sale of majority shares of the newly formed subsidiary, without transferring full ownership to strategic private sector partner.
Pakistan’s federal government had already reiterated to run the PSM through Public Private Partnership for which 95 per cent of the existing 9,500 employees would be terminated in different phases after paying them monetary benefits. On average, every sacked employee was estimated to receive PKR 2.3 million. In the first phase, the government has paid around Rs10 billion to 4,500 sacked employees. The Mill was closed down in 2015. The loans and liabilities had increased to PKR 230 billion and losses to PKR 200 billion. The federal government has to pay PKR 750 million for salaries and pensions of the PSM employees. The federal government had paid PKR 35 billion on salaries of the closed PSM.