Abraaj to sell stake in Pak power firm for $1.77b

karachi — China’s Shanghai Electric power company will buy a controlling stake in K-Electric, a power generation and distribution company in Pakistan’s largest city, for $1.77 billion, KElectric’s parent company said.

Dubai-based Abraaj Group said it had entered into a definitive agreement with China’s state-backed Shanghai Electric to divest its 66.4 per cent stake in K-Electric.

K-Electric serves around 2.2 million customers in and around Karachi, Pakistan’s largest city with a population of about 20 million. It is involved in both generation at thermal power plants and power distribution.

“Today marks a milestone in that partnership as we enter into a definitive agreement to divest our stake in a high-performance business and market leader to a strategic buyer who is fully committed to continuing this success story into the future,” Arif Naqvi, Abraaj’s chief executive, said.

When completed, the deal will be biggest M&A agreement in Pakistan in a decade.

“The K-Electric transaction only marks the beginning of SEP’s cooperation with Abraaj and we look forward to further collaboration in many other areas in the future,” Wang Yundan, Shanghai Power’s chief executive, said.

Shanghai Electric announced its intention to bid for the stake in August. — Reuters