There is no plan as to how restructuring and rightsizing of the workforce, if required, would be done before offering the entities for sell-off. In response to a query as to how much work has been done on VSS for employees, its cost and any funds earmarked by the Finance Ministry for the purpose, this senior official stated that Finance Ministry has nothing to do with financing VSS. These SOEs are financially autonomous with independent Board of Directors which are empowered to take these decisions and arrange financing for implementation of their decisions. Finance Ministry would not provide resources to SOEs if there is a golden handshake or a VSS, the source added.
According to official, the BoDs of each entity would decide the volume of shares - 24 per cent or 26 per cent or any other volume - to be privatised. Sources said the government may have identified the units that it intends to privatise and other formalities would be pursued once the list is cleared by the Council of Common Interest (CCI) and the Federal Cabinet. They said the first step is the identification of the entity or list of entities to be privatised which would be followed by appointing a financial advisor. The next step is to carry out the legal, technical, financial and human resources due diligence for presentation to the bidders. The present government has not convened any meeting of the Cabinet Committee on Restructuring (CCOR) to discuss a strategy about restructuring of the entities yet. This maybe because the government first wants approval from the CCI and Cabinet for privatisation before it debates and finalises the issue of restructuring and a Voluntary Severance Scheme.
In a typical transaction the PC, in consultation with the relevant ministry, submits a summary of the proposed transaction to its Board. The Summary justifies the need for privatising the property, outlines the likely mode of privatisation, and sometimes seeks guidance on issues relating to such matters as pricing, restructuring, legal considerations, and the regulatory framework. Once endorsed by the Board, it is submitted to the Cabinet Committee on Privatisation for approval or Cabinet, if necessary.