Sui Southern Gas Company (SSGC) is to appoint a merchant bank in February to manage the first stage of its privatisation. This will involve placing part of the government’s holding with a foreign gas company. The two leading candidates are understood to be Canada’s Novacorp International, part of Nova Corporation of Alberta, and British Gas.
In the first stage of the privatisation, the government will sell 26 per cent of SSGC to a foreign investor. SSGC is looking for a company committed to further investment and technology transfer, officials say. Nova Corporation and British Gas have both shown serious interest in acquiring the 26 per cent, they say. The government now owns 70.4 per cent directly and more than 20 per cent indirectly.
The second stage will involve reducing the total government shareholding to 40 per cent through a public share offering. This is to take place by June, according to an agreement signed with the Asian Development Bank in September 1992. It is hoped that finding a foreign buyer before offering shares on the stock exchange will maximise the chances for a positive response and avoid the problems experienced by Sui Northern Gas Pipeline Company (SNGPC), for which privatisation failed in August 1992 because of undersubscription (MEED 31:7:92).