Shanghai Electric Power(SEP), a subsidiary of State Power Investment Corporation of China will soon be taking over affairs at K electric after a major deal has been signed between the Abraaj group and SEP on Sunday.
Abraaj Group, a global organization, invested huge stakes in K electric, it has recently announced that $1.77 billion stake in K electric will be sold to Shanghai Electric Corporation. This is said to be the largest private sector transaction in Pakistan involving two huge conglomerates.
Abraaj Group Founder and Group Chief Executive Arif Naqvi boasted the deal and marked the deal as a milestone achievement. Naqvi said
Today marks a milestone… as we enter into a definitive agreement to divest our stake in a high-performance business as market leader to a strategic buyer who is fully committed to continuing this success story into the future.
Chairman of SEP Wang Yundan also spoke on this occasion recognizing the capability of the management team at K electric who have been controlling matters for many years now. Yudan said:
“SEP appreciates what Abraaj has achieved at K-Electric over the past seven years and recognizes the performance and capability of K-Electric’s management team.
He further expressed his desire to transform K electric into a world class organization and make it an exemplary institution.
“SEP will leverage its own strengths as a strategic investor and further realize K-Electric’s potential to provide better services to the people of Pakistan and the Government of Pakistan. SEP is confident about working together with Abraaj in the future to transform K-Electric into one of the best companies in Pakistan.
The management at Abraaj group has notified stock exchange as well about the recent exit and its plan to transfer shares. Though the management brought the company into profitability yet K electric was still heavily criticized for poor distribution of electricity.
K electric provides electricity to millions of people in Karachi, the organization got privatized in 2005 after which Abraaj group took a majority stake in 2009. Since its privatization, this will be the fourth change in management along with third change in ownership.
Serving a population of over 20 million, K electric is yet to prove it’s worth and credibility.