K-Electric confirms divestment

KARACHI: KES Power, majority shareholder of Abraaj Group, has communicated that Abraaj is evaluating the possibility of divesting its shareholding in K-Electric Limited (KEL), a bourse filing said on Monday.

“Abraaj is evaluating the possibility of divesting (directly or indirectly) its shareholding in K-Electric, which will be subject to a prescribed sale process, due diligence and execution of binding documentation,” says a KES letter communicated to KEL.

Last week, two big Chinese power companies, the sate backed Shanghai Electric Power and Golden Concord Holdings Ltd had shown interest to acquire stakes in K-Electric with a total estimated market value of $2.3 billion.

“Our company has embarked on preliminary work on the acquisition of a stake in K-Electric,” Shanghai Electric had said in a statement issued on Shanghai Stock Exchange on August 22.

“We have not entered into any exclusive negotiations yet and the size of the stake has also not been firmed up.”

Dubai-based private equity firm Abraaj Group has flagged its intention to sell its stake of about 66 percent in K-Electric. As of last Monday, Abraaj´s stake was valued at around $1.5 billion.

The government owns about 24 percent in K-Electric. A large number of shares in the shape of free-float are also in circulation in the stock market.

Chinese clean-energy group Golden Concord Holdings Ltd, according to a foreign media source, is also competing with Shanghai Electric Power Co for control of K-Electric Ltd.

The two Chinese companies are among bidders asked to submit binding offers by the end of this month for Abraaj Group's 66 percent.

French utility Engie SA and at least one investment fund are also in the final round, said the news story.