JPMorgan, CLSA vie for US$2bil Pakistan power sale

KARACHI: JPMorgan Chase & Co, CLSA and Credit Suisse Group AG are among foreign banks pitching for a role on Pakistan’s biggest privatisation in over a decade, which could raise around US$2bil, people with knowledge of the matter said.

The government’s sale of two LNG-fired power plants could draw interest from Chinese and Middle Eastern investors, one of the people said, asking not to be identified because the information is private.

Pakistan received about 10 bids from groups seeking a financial advisory role and expects to pick banks by the end of March, another person said.

Citigroup Inc and Standard Chartered Plc made their own separate proposals, while Lazard Ltd is pitching with Pakistani brokerage Next Capital Ltd, the people said.

Prime Minister Imran Khan is pursuing a divestment that would rank as one of the biggest-ever mergers and acquisitions in Pakistan, as he seeks to bridge a financing gap of more than US$12bil and avoid a balance-of-payments crisis.

The nation has secured loans from Saudi Arabia and the United Arab Emirates and is close to a loan agreement with the International Monetary Fund.

“The sale will bring in much-needed foreign currency into the country, complementing foreign government loans and a likely IMF bailout package,” said Arif Rafiq, an analyst at the Washington-based Middle East Institute.

Pakistan is selling National Power Parks Management Co, the state-owned firm that owns and runs the 1,230MW Haveli Bahadur Shah plant and the 1,223MW Balloki plant.

Both plants are located in Punjab province, Pakistan’s most populated, and started operations in the past two years.