The Al-Abbas Group confirmed to the Privatisation Commisison in a letter Wednesday that they would buy out Thatta Cement at Rs 9.95 per share, or a total of Rs 1.12 billion since the Star Cotton Corporation, the highest bidder for the transaction, backed out of the bidding, a source close to the deal told Daily Times. A source at the Privatisation Commission also confirmed that a letter was received from Al-Abbas Group to this effect. When contacted, Haji Ghani Usman, chairman of Al-Abbas Group confirmed that his company had accepted the PC¹s offer for a total of Rs 800 million plus Rs 80 million for a golden handshake scheme and the acquisition of Rs 240 million in loans. He also said the Arif Habib Group was a partner in the transaction. Thatta Cement Company, a wholly owned subsidiary of State Cement Corporation started commercial operations in 1982 and has a plant capacity of 1000 tonnes per day. The unit is located 115 km north east of Karachi in District Thatta.
Mr Usman said that his group¹s interest in the company stemmed partly from the quality of the plant. ³It¹s a 20-year old Mitsubishi plant which has had no technical difficulties,² he said. He also said his management team sees strong prospects ahead for the cement sector which is already running at 85 per cent capacity. The group plans to first convert the plant to coal which will cost between Rs 300 million and Rs 350 million and then invest another Rs 800 million in capacity expansion. ³Currently the company earns Rs 8 million a month and we are confident we will be able to raise this to Rs 15 million a month within the next 16 to 18 months,² Mr Usman said.
An earlier bidding for the company was held on August 28, 2003 during which four companies which had deposited earnest money, participated in the bidding to acquire 71.7 million shares in the company. These were the Al-Abbas Group of Companies, Bestway Cement, Haji Saifullah Group and Star Cotton Corporation. During this bidding, the highest offer received was from the Haji Saifullah Group (Rs 6.70 per share) while Al-Abbas made the second highest offer. However, the bidding failed as the PC asked the highest bidder to raise their bid to Rs 9 per share within a period of three days.