China's Shanghai Electric Power to take over K-Electric as last hurdle removed
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KARACHI - Defence Ministry had given security clearance to Shanghai Electric Power (SEP) for the acquisition of K-Electric.
SEP received no-objection certificates from the Interior and Defence Ministries paving way for its 66.4pc majority stake acquisition in K-Electric. The no-objection certification from the defence ministry was provided on assurance that power supplies would be provided round the clock to defence installations.
Due to expiration of Amended Implementation Agreement, the privatization commission (PC) has directed the power division for inking a new agreement regarding the guaranteeing of supply to defence installations always.
Abraaj Group, the current owner of K-Electric had refused to provide the Sale Purchase Agreement to the PC, when requested.
A major obstacle has been removed on part of the Defence ministry regarding the deal, which took place last year when SEP acquired a 66.4pc majority stake in K-Electric for $1.77b.
The seller Abraaj Capital has been determined to close the deal at the earliest and its officials also met Prime Minister Shahid Khaqan Abbasi last month to enlist his support.
Another issue creating hindrances in the conclusion of K-Electric’s acquisition is the settlement of outstanding receivables on part of the company, which till now remains unresolved, said Secretary Power Division Yousaf Naseem Khokhar.
