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IN THE NAME OF GOD

 

MINISTRY OF ECONOMIC AFFAIRES AND FINANCE

 

Executive Instruction Subject Matter  of Article ( 22 ) of the Law on Amendment of the Law of Fourth Economic , Social and Cultural plan of the Islamic Republic of Iran and Implementation of General Policies of Principle  (44 ) of the Constitution

 

 

 

Article 1 – Terms in this Instruction are defined as :

 

a – Law : The Law on Amendment of the Law of Fourth Economic , Social and Cultural plan of the Islamic Republic of Iran and Implementation of General Policies of Principle ( 44 ) of  the constitution .

 

b – Shares : Shares of the company subject to divestiture within the frame work of the Law .

 

c – Organization : Privatization Organization as legal representative of the Issuer and offeror of shares

 

d – Issuance and public offer : Issuing and offering shares to the public whether gradual sale or block sale of shares in the Stock Exchange Market or outside of it .

 

e – Commitment of Subscription and Commitment  of Purchasing Shares :  Commitment of the third party for purchasing all or part of shares which are not sold within the period specified in the contract for public offer .

 

f –Share-Offering Advisors: capital financing companies , banks , credit institutions and investing companies who undertake subscription or purchasing shares .

 

g – Other Advisor : Real or legal persons including financial and investment advisory firms ,subject matter of the Law on facilitation of bank facilities and reduction of project expenses and expediting implementation of production expenses and increasing financial recourses and efficiency of the banks – ratified

 

 

by the parliament in 2007 , who are approved by the Ministry of Economic Affairs and Finance as well as audit firms who have obtained the permission for rendering financial advisory services .

 

h – Feasibility Report : Analytic report which reflects the situation of the divestible company and related industry in details and includes the view point on the price of divestible shares .

 

i – Contract : the contract , subject matter of item ( 6 ) of paragraph  ( b ) of Article ( 40 ) of the Law .

 

Article 2 -  For issuance and public offer of the shares , "Organization"  may use the services of share-offering advisors  for the commitment of subscription and commitment of purchasing all or part of the shares .

 

Article 3 – Organization may use the services of the share – offer advisors or other advisors for the purpose of preparing feasibility report , following up the issuance and public offer of the shares , Marketing studies, Evaluation  and Marketing for the sale of shares , in accordance with the related  regulations.

 

Article 4 – Payment of fees to the advisors , subject matter of this instruction, shall be made upon proposal of Managing Director of the «Organization » and approval of the Executive Board of the "Organization" in the following order :

 

1 – To the ceiling of 250 million rials  for preparing feasibility  report and share marketing studies

 

2 – Maximum amounts payable for the evaluation  and marketing for sale of shares will be as per the following table :

 

 

 

 

 

 

 

 

 

 

Value of the shares sold (following the marketing) or shares priced ( Million rials) 

     Fees Coefficient

Maximum amount of Fees in       respect of the                                                                          surplus

(Million rials)  

Maximum                 amount of Cumulative Fees 

 

(Million rials)  

Less than 500

0 / 006

3

3

From 500 to 1000

in respect of the surplus

0 / 003

15

18

From 1000 to 5000

in respect of the surplus

0 / 005

20

38

From 5000 to 10,000

in respect of the surplus

0 / 001

5

43

From 10,000 to 100,000 in respect of the surplus

0 / 0005

45

88

From 100,000 to 500,000 in respect of the surplus

0 / 0003

120

208

From 500,000 to 1000,000in respect of the surplus

0 / 0001

50

258

1000,000 and more

in respect of the surplus

0 / 00005

242

500

 

3 – Maximum fees payable for the commitment of subscription or commitment of purchasing shares as per the following table :

 

 

Value of subscribed shares ( Million rials)

Fees ( rial – percent )

Maximum amount of Fees

 

( Million rials)

Maximum amount of Cumulative Fees  (Million rials)  

Less than 100

3,000,000

3

3

From 100 to 1000 in respect of the surplus

0 / 7

63

66

From 1000 to 50,000 in respect of the surplus

0 / 5

2,445

2,511

From 50,000 to 500,000 in respect of the surplus

0 / 3

13,467

15,978

From 500,000 and more in respect of the surplus

0 / 1

14,022

30/000

 

 

Note 1 – Fees subject matter of paragraph (1) of this Article will only be payable with respect to the divestible shares whose value are more than  Rls. 50,000,000,000

 

Note 2 – In case a contract is made for commitment of subscription or commitment of purchasing shares , "Organization"  is not authorized to make a contract and pay for the fee of evaluating and marketing of share .

 

Note 3 – With respect to the services mentioned in Articles (2) and (3) of this instruction , "Organization" , share-offering advisor and other advisors have to provide in the related contract , the time-table  for  performing  obligations  and  providing  services  as  well as duties  and  scope of responsibilities of either parties as per their agreement . Advisor is obliged to clearly define the type and  mechanism of measures in accordance with scientific standards . Failure to comply with this obligations , depending on the case , will result in penalties in conformity with the contract .

 

Note 4 –" Organization " may request all the advisors who make a contract with it for the execution of this instruction, to provide professional insurance liability within scope of their commitments.

 

Article 5 – Advisor will be selected , in accordance with the by-law of transactions of the Privatization Organization , by the « Advisor Selection Board » consisting of the following :

 

a -  Director General and members of the Executive Board of the  "Organization "

b – Representative of the Ministry of Economic Affairs and Finance .

 

c – An expert who is specialized in the field of activity of the divestible firm and services in question , selected by the "Organization "

 

 

 

 

 

 

 

 

 

Article 6 – Duties of the " Advisor Selection Board " are as follows :

 

1 – Study and technical evaluation of  the proposal of the advisors who apply to perform services mentioned in this instruction .

 

2 – Evaluation of the financial proposals , in each case , within the framework of the regulations pertaining to the payment of fees mentioned in this instruction .

 

 

Article 7 – "Organization " will have to envisage the funds needed for this instruction in its budget annually and take necessary measures for its approval in the general assembly of the "Organization"

 

 

Article  8 – This instruction has been approved in eight Articles and four Notes .

 

 

 

Seyed Shamseddin Hosseini

Minster of Economic Affairs and Finance