KARACHI: China’s state-owned Shanghai Electric Power Company Limited on Monday renewed the intention for the fifth time in past three years to acquire a majority stake in K-Electric from the financial crisis-hit Abraaj Group.
The submission of new public announcement for the acquisition of shareholding by Shanghai Electric has once again given it a nine-month extension for meeting all regulatory requirements.
Shanghai Electric had agreed with Dubai-based Abraaj Group on acquiring a majority stake in K-Electric for $1.77 billion in October 2016. However, it has now become uncertain whether the business deal will still be executed at the agreed price or will be renegotiated.
“K-Electric has received a fresh public announcement of intention from Shanghai Electric Power Company to acquire up to 66.04% voting shares in K-Electric Limited,” K-Electric Chief People Officer and Company Secretary Muhammad Rizwan Dalia said in a notification to the PSX on Monday.
K-Electric’s share price dropped 2.2%, or Rs0.08, to Rs3.55 with trading in 55.56 million shares at the PSX.
A high official of K-Electric told The Express Tribune in June that the Chinese firm was expected to acquire the power producer sometime in September or October 2019 as the National Electric Power Regulatory Authority (Nepra) had revised the power tariff upwards for end-consumers up to Rs3.63 per unit.
“This (revised tariff) is a major breakthrough in the execution of the business deal,” he remarked.
Published in The Express Tribune, October 1st, 2019.