KARACHI: China’s Shanghai Electric Power Company Limited (SEP) has extended its deadline to buy a majority stake in K-Electric Limited (KEL) by 90 days, the brokerage house managing the deal said on Monday.
SEP, which agreed to acquire 66.40 percent of KEL’s shares for $1.77 billion in 2016, has faced delays in obtaining regulatory approvals from both China and Pakistan. The brokerage house, Arif Habib Limited (AHL), said in a notice to the Pakistan Stock Exchange (PSX) that SEP had requested more time to make the public announcement of the offer, which was due on Jan. 21, 2024.
“On behalf of the acquirer, we would like to intimate Securities and Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange (PSX) that the acquirer is extending the date for public announcement of offer by ninety (90) days… Therefore, the time for making the Public Announcement of Offer in respect of the transaction is extended till April 20, 2024,” it added.
AHL said the parties involved in the transaction had taken all reasonable steps to obtain the required approvals, but some of them were still pending. It adeded that the parties under this transaction have taken all reasonable steps towards obtaining the regulatory approvals as required under the applicable laws of the People’s Republic of China, as well as from domestic regulatory bodies as required under the laws of Pakistan. “Some of these approvals are, however, yet to be issued and as such the parties under this transaction cannot complete the transaction before receipt thereof,” the notice said.
“Please be assured that the parties under this transaction shall continue to apply all efforts in expediting the above approvals and processes,” AHL said. It added that some of the conditions for the deal required the relevant authorities to seek internal approvals from various ministries and departments, which were beyond the control of SEP.
KEL, formerly known as Karachi Electric Supply Company, is Pakistan’s largest power utility, serving about 20 million people in the country’s biggest city. SEP, a subsidiary of State Power Investment Corporation, is one of the largest power generation companies in China.
Last year in October, SEP renewed its commitment to buy KEL’s shares. Shan A Ashary, the investment advisor of the Saudi Group, which owns the majority stake in KEL, had said at the time that a fresh offer would be given, and the deal with SEP could go up to $2 billion.
