Troubled private equity firm reportedly nears agreement to sell 66% interest in Pakistan power company
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.