K-Electric’s existing owners have confirmed that they are the majority shareholders in the integrated power company, which is available for sale for the past six years, and that China’s Shanghai Electric Power is a top potential buyer.
They reaffirmed their stance in the wake of conflicting reports in the media that one of the three major shareholders had sold its stake to a new investor.
With the assertion, the consortium of Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding) of Kuwait and Infrastructure Growth Capital Fund (IGCF) has remained the majority shareholder in KE.
The consortium is holding 66.40% shares in the firm. Besides, the government of Pakistan holds 24.36% shareholding.
IGCF, a private investment firm registered in Cayman Islands, is an indirect shareholder in KE. It confirmed that it had not sold any KE shares to new investors, according to a KE notification sent to the Pakistan Stock Exchange (PSX) on Tuesday.
“K-Electric has not been informed of any specifics regarding potential transaction,” KE Chief Risk Officer and Company Secretary Rizwan Pesnani said in the notification.
“There is no transaction being contemplated that would result in any direct or indirect change in IGCF’s shareholding interest in K-Electric; and the said institutional investors cannot be considered indirect shareholders of K-Electric merely by virtue of their investment in IGCF,”
People, who claim to have knowledge of KE affairs, said that IGCF had confirmed its shareholding in KE, while the two other majority shareholders in the consortium had also not sold their stake to any new investor.
They said that reports regarding corporate restructuring of the firm had nothing to do with the shareholders and management of the company.
A recent letter believed to have been issued by Prime Minister’s Office read that KE’s corporate restructuring had been initiated. According to sources, it was regarding the resolution of KE’s pending receivables and payables worth a net Rs62 billion.
“KE is undergoing corporate restructuring and requires four to six weeks for change in its internal management,” the notification said two weeks ago.
“KE shall be able to take a definitive position only after the process of corporate restructuring is concluded.”
The power company has to receive outstanding dues from the federal and provincial governments. On the other hand, it has to clear dues of Sui Southern Gas Company (SSGC), reports say.
China’s state-owned Shanghai Electric Power has remained a potential buyer of KE for the past six years.
It offered a price of $1.77 billion to the existing shareholders some six years ago. Later, they put the sale-purchase transaction on hold until the settlement of KE payables and receivables.
Besides, the downward revision in KE’s base power tariff for end-consumers also stood as a stumbling block.
Sources said that Shanghai Electric would re-evaluate the company and offer a new price to the shareholders once the government of Pakistan and regulatory authorities gave the go-ahead.
Earlier, Prime Minister Shehbaz Sharif formed a task force and tasked former premier Shahid Khaqan Abbasi, who heads the task force, with resolving all pending issues hampering the KE business deal.
Besides, the Sindh government has asked the federal government to take it on board regarding developments related to KE sale as it wants to protect the rights of consumers living in the province.