Abraaj to sell Pak­istan K-Elec­tric stake to SEP

Kuwait Times - - BUSINESS -

Abraaj Group has agreed to sell its ma­jor­ity stake in Pak­istan’s K-Elec­tric to Shang­hai Elec­tric Power Co (SEP) for $1.77 bil­lion, the emerg­ing mar­ket-fo­cused pri­vate eq­uity firm said yes­ter­day. The trans­ac­tion is the largest M&A deal in Pak­istan in a decade, and comes at a time of height­ened Chi­nese in­ter­est in in­vest­ing in the South Asian na­tion as part of its “One Belt, One Road” ini­tia­tive.

Abraaj-con­trolled KES Power will di­vest the 66.4 per­cent stake sub­ject to reg­u­la­tory ap­provals be­ing ob­tained. SEP was among a num­ber of Chi­nese bid­ders, in­clud­ing China South­ern Power Grid, which were lin­ing up to ac­quire the stake, sources told Reuters in Au­gust. Chi­nese com­pa­nies’ in­ter­est comes af­ter China last year an­nounced en­ergy and in­fra­struc­ture pro­jects worth $46 bil­lion in Pak­istan, with a view to open­ing a trade cor­ri­dor link­ing western China with the Ara­bian Sea. K-Elec­tric is Pak­istan’s big­gest elec­tric­ity com­pany, sup­ply­ing power to 2.5 mil­lion cus­tomers in and around Karachi, the coun­try’s big­gest and wealth­i­est city.

The pri­vate eq­uity firm first ac­quired its stake in K-Elec­tric in 2009, but said in June 2014 that it had man­dated Cit­i­group to eval­u­ate op­tions for the in­vest­ment. “SEP will lever­age its own strengths as a strate­gic in­vestor and fur­ther re­al­ize K-Elec­tric’s po­ten­tial to pro­vide bet­ter ser­vices to the peo­ple of Pak­istan and the govern­ment of Pak­istan,” SEP Chair­man Wang Yun­dan said in the state­ment. — Reuters

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