Dubai's Abraaj 'close' to selling K-Electric stake to Chinese firm

Troubled private equity firm reportedly nears agreement to sell 66% interest in Pakistan power company
Dubai's Abraaj 'close' to selling K-Electric stake to Chinese firm
Abraaj was one of the most high-profile private equity companies in the Middle East until its dramatic collapse last year.
By Staff writer
Mon 07 Jan 2019 02:48 PM

Troubled private equity firm Abraaj is reportedly close to reaching agreement with the Pakistan government to sell its 66 percent stake in Karachi-based electricity company, K-Electric to a Chinese group.

The UK's Financial Times quoted senior people at Abraaj as saying that the deal, which was previously held up due to regulatory approvals, is being renegotiated at a lower price..

Two years ago, K-Electric’s sales price to Shanghai Electric Power was quoted at about $1.8 billion, which would have earned Abraaj about $450 million.

The FT said that for the creditors of the Dubai-based Abraaj, the proposed sale is still likely to prove the biggest source of recovery funds.

Abraaj was one of the most high-profile private equity companies in the Middle East until its dramatic collapse last year.

The firm reportedly owes banks more than $1 billion and is being restructured after it defaulted on loans and was found to have borrowed money from some of its own funds to meet operating expenses without investors’ consent.

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