The minister reviewed the proposed transaction in detail and also discussed proposed key components of PSM's liability settlement plan to ensure that all liabilities of PSM workers and other stakeholders are addressed. Two models were discussed including zero coupon bonds. Minister Aziz further recommended that the financial advisors should develop a plan in which the liabilities of PSM should be settled over a period by devising a payment plan supported with an effective cash flow model. The financial advisors agreed to review the additional payment and financial options.
Concluding the meeting, Daniyal Aziz directed the financial advisors to update all data on PSM and prepare the liability settlement plan on priority. He also directed the financial advisors to prepare a five to seven years revenue plan as part of the transaction structure to ensure the financial viability of PSM.
He also directed the financial advisors to settle their outstanding payments with PC and move ahead with the transactional work, directing them to complete the work within four months. The PC Board had approved a thirty-year transaction structure proposed by the financial advisors for the restructuring of Pakistan Steel Mills (PSM) in January 2017.
The proposed structure includes a tripartite concession agreement among the government, PSM and the investor for a period of 30 years on the basis of revenue sharing. According to the structure plan, the PSM land will remain with the government while the plant and machinery will be leased, invested and then transferred back to the government for a maximum period of 30 years, while no asset of PSM will be sold.