Shanghai Electric Power Company, which is looking to buy 66.4 per cent shares in K-Electric, has called an extraordinary general meeting of its shareholders to seek a one-year extension in the timeline for the completion of the transaction, Foundation Securities said in a research note on Wednesday.
The Karachi-based brokerage said Shanghai Electric Power Company intends to extend the validity of the shareholders’ resolution for this transaction from Dec 15 this year to Dec 15, 2018.
“Except for the validity of the resolutions passed at the shareholders’ general meeting of this transaction being extended, the rest of the trading plan will remain unchanged,” the brokerage house said.
Foundation Securities Head of Research Nauman Khan said he accessed the Dec 12 regulatory filing on the Chinese website of the Shanghai Stock Exchange by using Google Translate.
A spokesperson for the PR agency representing Abraaj, which currently controls a majority shareholding in K-Electric, would neither confirm nor deny the news report. “We will check with the team on our ability to comment and will let you know,” she said in an email.
Given K-Electric’s importance as the country’s only vertically integrated power company responsible for providing Karachi and adjoining areas with electricity, the deal requires approvals from a host of regulatory bodies, competition commission and federal ministries.
A report in The Express Tribune on Nov 25 quoted Power Division Secretary Yousaf Naseem Khokhar as saying that his department had yet to give clearance for the transaction. “The issue was still far from over and the matter will go before an inter-ministerial committee for approval. The Power Division still seeks resolution of outstanding dues,” it quoted him as saying.
Initially, the size of the transaction was expected to be $1.77 billion. But a lower-than-expected determination of the multi-year tariff by the power regulator is likely to reduce that amount.
