The $1.77bn deal has been delayed for more than two years
China’s Shanghai Electric Power (SEP) will acquire K-Electronic from embattled private equity firm Abraaj Group in the second half of 2019, according to media reports.
According to Pakistan’s Express Tribune, the deal – which was signed in October 2016 at $1.77 billion – is now likely to be implemented after Pakistan’s National Electric Power Regulatory Authority (NEPRA) revised the power tariff upward.
“Naturally, this should sleep up the transactions, which has been pending for around three years now,” K-Electric chairman Ikram Sehgal said.
“I think if no hiccup comes in the way, the Chinese firm will take over the company by September-October 2019.”
A dispute between NEPRA and K-Electric on what the tariff should be led to the company not filing any profit or loss statements in 2017 or 2018.
“Now, we have prepared the company’s accounts for the year 2017 by calculating the sale of power at the recent notified new tariff,” Sehgal said.
“Accounts for 2018 are expected to be ready for filing (at the Pakistan Stock Exchange) by the end of this month. K-Electric will file accounts for both years simultaneously in a few weeks,” he added.
In January, it was reported that Abraaj was close to a deal with Pakistan’s government to sell its 66 percent stake in K-Electric.
At the time, the UK’s Financial Times quoted senior Abraaj executives 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 would have earned Abraaj about $450 million.