Why Shanghai Electric Power Company has withdrawn from K Electric purchase?

Why Shanghai Electric Power Company has withdrawn from K Electric purchase?

ISLAMABAD - A notification sent to Pakistan Stock Exchange (PSX) on Monday by K-Electric revealed Shanghai Electric Power Company Limited had withdrawn its offer to acquire 66.4 percent majority stake in the company.

In a notification filed by Arif Habib Limited as manager to the offer said, “would like to intimate that the time period for making the public announcement of offer (as extended by the Securities & Exchange Commission of Pakistan) will lapse as of March 26, 2018 (“expiry date”) on the basis that certain regulatory and other approvals for the transaction remain outstanding.”

The notification further read “In the premises, and pursuant to Regulation 21(1)(e) of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017 read with the Securities Act 2015, we hereby give notice that as of the expiry date, the POI stands withdrawn.

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.”

However, Shanghai Electric indicated in the announcement that they remain fully committed to consummate the transaction to acquire the stake in K-Electric.

In a comment to *Pakistan Today, *Pak Kuwait Investment Co AVP Research Adnan Sheikh said “This sets a bad precedent for foreign investors. It shows government’s and the regulators laziness. This deal has been going on for over a year now.”

In mid-March, K-Electric had warned delay in clearance of K-Electrics acquisition by Shanghai Electric Power by regulatory authorities would hamper investor confidence.