The government, on Friday, gave a security clearance to the proposed sale of K-Electric by its existing Dubai-based owner to a Chinese company; that is the sale of shares held by KES Power Ltd in K-Electric Ltd (KEL) to the Chinese multinational Shanghai Electric Power Ltd (SEPL).
It was a major hurdle in the deal pending for almost two years.
A Cabinet Committee on Privatisation, headed by the Prime Minister Shahid Khaqan Abbasi, took the decision during a meeting at the PM office.
“The meeting discussed the matter of the sale of its shares by KES Power Limited in K-Electric Limited to Shanghai Electric Power, and decided to issue the National Security Certificate subject to ratification by the federal cabinet,” a government statement said.
Shanghai Electric Power had withdrawn its offer to acquire K-Electric twice in the last 2 years – first was in June 2017 and then recently on March 26th, 2018 due to the regulatory reasons. The next day, however, it sent a notification to the PSX stating that they are still interested in acquiring 66.4 % stake in the company
According to the shareholding breakups, government holds 24.36 % stake in KE, followed by foreign shareholders (3.09%), local public (2.69%), mutual funds (1.67%), financial institutions, insurance Takaful, Modarabas and pension funds (1.48%), others (0.18%) and public sector companies and corporations (0.13%).
In the meeting, several issues linked to the restructuring of Pakistan International Airlines and privatization of Pakistan Steel Mills (PSM) were also discussed.
PIA has suffered huge losses of about Rs. 145 billion in the last four years and PSM losses in the last 10 years amount to roughly Rs. 188 billion.