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PORT MORESBY, Papua New Guinea (November 10, 2000 - Papua New Guinea Post-Courier/PINA Nius Online)---Work on the partial sale of the Papua New Guinea Banking Corporation is progressing well, the bank’s executive chairman Garth McIlwain said.

Mr. McIlwain made the comment while announcing that the independent due diligence report on the PNGBC, commissioned by the Privatization Commission, had been completed.

He said it would be presented to the board.

The report was conducted by KPMG and Blake Dawson over six weeks. It paves the way for bids to be called for the bank’s partial sale, he said.

He said he expected tenders for the sale to be requested from the world banking community during the first quarter of next year.

The successful implementation of PNGBC’s partial sale and the rural development program would ensure PNG received a $US 20 million loan from the World Bank.

The loan is part of the $US 90 million governance and structural adjustment loan approved earlier this year. The $US 20 million is tied specifically to these two agenda items.

Under the initial agreements between the state and the World Bank and the International Monetary Fund, PNGBC would be brought to the point of sale next month.

Privatization Commission Chairman Ben Micah said this week that the first sale effort would be through a partial trade sale.

Mr. Micah said a portion (he did not specify how much) would be set aside for unit trusts -- with some equity offered as a discount to the community and employees -- while the remainder would be listed on the Port Moresby Stock Exchange.

Mr. McIlwain said that while there were areas for improvement, the bank was in good shape and would be an attractive proposition for potential buyers.

"Importantly, since my appointment in mid-September, I have found that there are some improvements to be made, the bank overall is in good shape and I am certain it will be an attractive proposition for potential purchasers," Mr. McIlwain said.

"It should be remembered that PNGBC has about 45 percent of the country’s total banking assets.

"We have more than K 300 million (US$ 95 million) invested in treasury bills, an adequate cash flow and the resources to run the business and meet our day-to-day banking obligation," he said.

Mr. McIlwain said the tender process and subsequent privatization would be undertaken "in a totally transparent, ethical and professional way."

"For instance, only recognized banks from around the world would be considered, and they must have the approval of not only the Bank of Papua New Guinea, but their own central bank as well," he said.

Mr. McIlwain was appointed executive chairman in September after the Central Bank took over the operations of the PNGBC.

For additional reports from The Post-Courier, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The Post-Courier (Papua New Guinea).

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