HEC privatisation completed, IMS Engineering plans to upgrade and expand facility

ISLAMABAD: The government has concluded the privatisation of the Heavy Electrical Complex (HEC) after handing over the share certificates to the buyer M/S IMS Engineering (Pvt) Limited on Tuesday.

In a final settlement of the Rs1.4 billion transaction, the buyer IMS Engineering has not only made full payment but has also taken over additional liabilities of Rs752 million payable to the Bank of Khyber, a statement by the Privatization Commission said Tuesday.

The Bank of Khyber issued an NOC for the conclusion of the transaction. The caretaker minister for Privatisation, Fawad Hasan Fawad, congratulated all the stakeholders who contributed towards the conclusion of the sale agreement including the SIFC, State Bank of Pakistan, Ministry of Finance, Ministry of Industries, Chief Secretary KPK, the Bank of Khyber, the Financial Advisor and the team of Privatisation Commission.

The chairman of IMS Engineering, Mahmoud Haq expressed that plans for better utilization of the facility are already in place and that they expect to be able to make exports of 250-300 million dollars in two to three years. He also informed that they are replacing the current setup with state-of-the-art German-made machinery and equipment and will also endeavor to meet local demand which is currently met through imports.

The Federal Minister hoped that the privatization would result in increased productivity, new employment, tax revenue as well as foreign exchange earnings for the country.

On February 21, 2022, the Privatisation Commission executed the bid for selling 96.6 percent shares in the HEC to IMS Engineering at Rs99.999/share which would fetch Rs1.41 billion for the cash-starved government. PEL and Waves-Singer were unsuccessful bidders.

The bid for the government’s 14.4 million shares was carried out as per the transaction structure approved by the Federal Cabinet in December 2020. This was the first entity-level strategic transaction since 2015.

Interestingly, it was the fifth attempt at privatizing the HEC with prior unsuccessful efforts in 2006, 2011, 2013 and 2015. It is to be noted that in August 2019, the CCoP had placed the HEC on the active Privatisation list.

HEC is located in Hattar Industrial Estate, Haripur near the China-Pakistan Economic Corridor route, 2km from Kot Najibullah Interchange on the Hazara Expressway. This provides HEC-ready access to several key customers, including electricity distribution companies, while approximately 20 acres of additional land is available for diversification and expansion. HEC has a high-quality power transformer manufacturing facility with an annual production capacity of 3,000 MVA.