KPMG-led consortium to conduct due diligence, valuation and transaction structuring as Pakistan revives the privatisation of House Building Finance Company.
ISLAMABAD: The Privatisation Commission (PC) has signed a Financial Advisory Services Agreement (FASA) with a consortium led by KPMG to support the privatisation of House Building Finance Company Limited (HBFCL).
The agreement marks a fresh effort by the government to advance the sale of the state-owned housing finance institution after an earlier privatisation attempt failed.
KPMG-led Consortium to Advise on Transaction
The consortium comprises Bridge Factor, a corporate finance advisory firm; Haidermota & Co., a legal firm; HRSG, a human resources firm; and Asiatic Public Relations, a media and public relations firm.
The advisory team will provide expertise in financial advisory, transaction structuring and execution to assist the Privatisation Commission throughout the HBFCL privatisation process.
Under the agreement, the financial adviser will undertake comprehensive due diligence of HBFCL and advise the government on the most appropriate structure for the transaction.
The consortium will also conduct the company’s valuation and assist the Privatisation Commission during the marketing and execution phases.
Second Attempt to Privatise HBFCL
The latest initiative represents the second attempt to privatise HBFCL.
The previous privatisation process did not reach completion after Pakistan Mortgage Refinance Company Limited (PMRCL) emerged as the only bidder to qualify.
However, the transaction was subsequently halted when the Privatisation Commission rejected the bid because it was below the Reference Price approved by the Federal Cabinet.
The appointment of a new financial adviser is expected to help the government reassess the company’s value, transaction structure and market positioning before moving towards a fresh bidding process.
Focus on Due Diligence and Valuation
As part of its mandate, the financial adviser will conduct detailed due diligence of HBFCL covering relevant aspects of the company before recommending a transaction structure.
The adviser will also undertake valuation and provide support during the marketing of the transaction to potential investors.
The process is intended to ensure that the privatisation is conducted in accordance with the approved framework and applicable regulatory requirements.
Potential Impact on Housing Finance
The government expects the privatisation to support the development of Pakistan’s housing finance sector by bringing greater private-sector expertise into HBFCL.
A stronger private-sector role could help improve corporate governance, operational efficiency and service delivery, while potentially enabling the company to expand its housing finance activities.
A more competitive HBFCL could also improve access to housing finance, particularly for low- and middle-income households, supporting the government’s broader objective of promoting affordable housing.
The Privatisation Commission will now work with the financial adviser and other relevant stakeholders to advance the transaction through due diligence, valuation, structuring, marketing and execution stages.