Hold-ups in the privatisation plans for
Pakistan Reinsurance Company and Jinnah Convention Centre Widely negative market sentiments subdued investor confidence and high volatility have been given as reasons By Zunairah Qureshi
T
here are up to 21 Public Sector Entities (PSE) on the active privatisation list. This includes 10 energy sector entities consisting of 2 power plants and 8 regional electric supply companies. The rest belong to the real estate, financial, and industrial sectors, with the Heavy Electrical Complexâs (HEC) privatisation process having reached near completion in February. Among these are a number of PSEâs that face frequent blockades to smooth sailing processes. At times, this has meant the delisting of certain entities which have been placed on the privatisation list and after months of work, progress comes to halt usually owing to bureaucratic entanglement. The decades-long delay in the privatisation programme of the First Womenâs Bank Limited (FWBL) was covered by Profit earlier
PRIVATISATION
and can be read here. In September 2021, the State Life insurance Company (SLIC), which was added to the privatisation list in 2016 was delisted in its final stages when the Senate Standing Committee on Commerce proposed some amendments. According to sources at the Privatisation Commission (PC), the divestment plan for 20 per cent shares of the Pakistan Reinsurance Company Limited (PRCL or PakRe) awaits a similar fate. In addition, the Jinnah Convention Centre (JCC) in Islamabad has also come to an impasse after becoming close to its final stages in the privatisation process.
Pakistan Reinsurance Company Limited
F
ormerly called the Pakistan Insurance Corporation (PIC), Pakistan Reinsurance Company Limited was established in 1952 as Pakistan Insurance
Corporation under PIC Act 1952 to facilitate the local insurance industry. It is a public sector company under the administrative control of the Ministry of Commerce and is the sole reinsurance organisation operating in Pakistan. By way of which, all insurance companies in Pakistan are mandated to offer 35 percent of its reinsurance business to PRCL. In August 2019, Cabinet Committee on Privatisation (CCoP) approved the divestment of 20 percent shares of PRCLâs held by the government. By January 2020, HBL, Next Capital and Haidermota & Co. were appointed as financial advisors. Then in August 2020, CCoP and Federal Cabinet further approved the transaction structure for the divestment of 60,000,000 ordinary shares through Secondary Public Offering (SPO) at the Pakistan Stock Exchange (PSX) to Institutional, High Net Worth Individuals (HNWI) and Retail Investors (RI). Out of these shares 75 per cent will be offered
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