Abraaj buys controlling stake in Karachi power firm

POWER PLAY: Abraaj Capital has bought a controlling stake in Karachi Electric Supply Co. (Getty Images)

Private equity firm Abraaj Capital has bought a controlling stake in KES Power, the parent company of Karachi Electric Supply Co, to help boost generating capacity in Pakistan's largest city, it was revealed on Wednesday.

Dubai-based Abraaj, which manages about $5 billion in funds, said it was buying new shares in KES Power Ltd, giving Abraaj a 50 percent stake and management control of the firm.

Karachi is Pakistan's biggest city with a population of more than 13 million and is home to many industries, the country's two main ports and its main stock market.

Abraaj did not give a value for the deal, although local media has reported it could be worth as much as $400 million. A spokesman at Abraaj declined to comment.

The KESC was privatised in 2005, and a consortium led by Saudi Arabia's al-Jomaih group and Kuwait's National Industries Holding, who were the majority stakeholders, will remain as shareholders, Abraaj said.

The funds would be used to finance new equipment at KESC's ageing facilities, boost generating capacity and bring in management expertise, the equity firm said.

In August, Abraaj appointed Farrukh Abbas to head its operations in Pakistan as it looks to tap into Southeast Asia's second-largest economy, which is expected to grow at 6 percent or more for the next five years.

"Turning KESC around will demand time and, above all, a prerequisite that all stakeholders play their part," Abbas said in Wednesday's statement. "In-depth discussions and agreements are being finalized, notably with local, provincial and federal authorities.

Abbas added the agreements would be critical to keeping jobs at the electricity firm. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM