KARACHI (May 09 2003) : Pakistan Steel will offload its 10 percent shares through the Karachi Stock Exchange by the end of the current fiscal year.
All the formalities had been finalised in this regard and only financial advisers were to be appointed, said Pakistan Steel Chairman Lieutenant Colonel Muhammad Afzal Khan (Retd).
Speaking at the 32nd meeting of the 21st Century Business Club on “Pakistan Steel – Its turnaround to a success story” held at a local hotel on Thursday, he said that the public offering of Pakistan Steel's share would further improve the financial health of the corporation, which had already cleared its major liabilities and was now making profit.
The PS chairman said that the PS had so far earned a profit of Rs 700 million but was expected to reach Rs 1 billion by the close of the current financial year.
Afzal said, “We have our expansion plan. In phase one, the production capacity of the mills would be increased from 1.1 million tonnes to 1.5 million tonnes per annum.
This phase is to be completed by 2005. In the second phase, the capacity is to be increased from 1.5 million tonnes to 3 million tonnes per annum. This phase would be completed by 2006-07.”
He said that the government had shown its inability to foot expansion bills and had asked the mills to arrange money for its expansion programme.
“We have to stand on our own feet and meet the challenge. We have the necessary resources and funds that would be further supplemented by the public offering of 10 percent shares through the KSE. The money so earned would be spent on our expansion programme.”
Afzal said that in 1999 Pakistan Steel had inherited a loan of Rs 19.117 billion comprising principal amount of Rs 11.35 billion and interest of Rs 7.767 billion accrued during the previous two decades.
The government had decided that Pakistan Steel would pay back the principal amount in 12 equal yearly instalments along with mark-up, while the accumulated interest would be paid in seven instalments after the principal amount was fully paid.
He said that Pakistan Steel through its restructuring and reforms programme had already paid Rs 4.671 billion to the banks. “We will clear the second instalment by the end of June 2003.
We are, however, in a position to clear our liabilities even before the stipulated period and we would like to do so in due course of time.”
He said that out of more than 24,000 employees about 10,500 have been retired, removed or opted for voluntary retirement offers. “I want to bring this figure further down by reducing the strength to 12,500.”
He said that this did not mean continuous retrenchment in the staff. “This year, we are going to recruit 400 trained people.
There will be 200 technicians and 200 engineers. This will remain a continuous process so that fresh blood is inducted to replace retiring technicians and engineers. It will be a step towards human resource development.”
However, he did not agree with a questioner that the salary and allowances saved because of retrenchment of the staff was the major contributory factor in the profits of the Mills.
He attributed it to better management, sales promotion and enhancement in the capacity utilisation.
The PS chairman said, “In the current financial year Pakistan Steel has shown performance. It has broken all the previous records. Ever highest sales of Rs 19.25 billion has been achieved (July 2002 to May 6, 2003) ensuring a profit of Rs 700 million.
The inventory has also been brought down to the lowest level equal to less than four week's production capacity.”