A worker operates a bridge crane in a workshop at the Bin Qasim Power Station II plant, operated by K-Electric Ltd, in the Bin Qasim Town area of Karachi, Pakistan. [Photo/Agencies]

Karachi electrical distributor draws interest from international investors

Shanghai Electric Power Co Ltd, a Shanghai-listed power supplier, said it intends to acquire a majority stake in K-Electric Ltd, a Pakistan power utility, from a Dubai-based investor, according to its filing to the Pakistan Stock Exchange on Tuesday.

K-Electric Director Finance and Company Secretary Muhammad Rizwan Dalia said in a notification to the Pakistan Stock Exchange that the company has received a copy of the public announcement of Shanghai Electric Power's intention to acquire up to 66.4 percent voting shares.

Currently, 66.4 percent of the firm's voting shares are held by Dubai-based The Abraaj Group, and these had a market value of around $1.6 billion based on K-Electric's share price on Tuesday when the filing was made.

K-Electric supplies power to Karachi, Pakistan's largest city and economic hub with a population of 20 million. K-Electric has some 2.2 million consumers and 11,000 employees.

The Abraaj Group disclosed on Monday that it was evaluating the possibility of divesting－directly or indirectly－its shareholding in K-Electric, according to a Bloomberg report.

The deal, if successfully completed, will be the largest acquisition so far in Pakistan by any Chinese enterprise, and it would also become the largest foreign investment in Pakistan so far this year.

Shanghai Electric Power and Shanghai-based Golden Concord Holding Ltd, which runs a clean energy business, expressed an interest after Abraaj Group said earlier this month that it planned to sell its 66 percent stake in K-Electric.

French utility Engie SA and at least one investment fund are also in the final round for bidding, according to a report by Pakistan's news website thenews.com.pk.

Shares of Shanghai Electric Power Co Ltd have been suspended from trading since Aug 24.

Shanghai Electric Power Co Ltd has been investing in overseas markets for years, including in Japan, Turkey and Malta. If Shanghai Electric Power's bid is successful and the deal is completed, the Shanghai power supplier will be engaged in Pakistan's overall power supply chain.