KARACHI: The Shanghai Electric Power Ltd (SEPL) has sought the government’s support in accelerating the process of regulatory approvals to facilitate the completion of Sale-Purchase Agreement (SPA) of majority shares in K-Electric Ltd (KEL).
A delegation of SEPL led by Wang Yundan, the company chairman, called on the Prime Minister Shahid Khaqan Abbasi in Islamabad on Monday and apprised him of the current status of acquisition process of majority stake in KEL.
The premier assured the delegation that the government remains committed to supporting SEPL with a view to further liberalising the power generation and distribution sector. “To this extent, the government is committed to enabling the process [of KEL sale] to move forward subject to completion of all regulatory frameworks,” Abbasi told the delegation.
Meanwhile, KEL and Arif Habib Ltd (AHL), which is manager to the offer, informed the Pakistan Stock Exchange (PSX) that Shanghai Electric will be renewing its interest in purchasing controlling stake in KEL since the last public announcement of its intention (PoI) has run into its time limit.
The deal is valued at $1.77 billion. The time period for making the PoI of purchase of stake in KEL expired on Monday, which led the K-Electric to announce the withdrawal of intention for acquisition (directly or indirectly) of up to 66.40pc of its shares by SEPL.
The announcements made separately to the PSX by KEL and AHL on Monday were essentially formalities and did not mean to say that either the seller or buyer had walked out of the deal.
“As the acquirer continues to be fully committed to consummate the transaction pending receipt of regulatory and other approvals. The acquirer shall make a fresh public announcement of intention in accordance with the prescribed formalities immediately with effect from the expiry date,” the statement read.
Accordingly, the transaction will be consummated immediately upon receipt of remaining regulatory and other approvals.
The major hurdle to completion of the deal is the Multi-Year Tariff (MYT) for KEL to be decided by National Electric Power Regulatory Authority.
As for approvals, both Ministry of Defence and Ministry of Interior have given the no-objection certificates for the sale of majority shares to the Chinese company, but other approvals remain pending, the sources said.