Tracing K-electric’s journey to privatization

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KARACHI: Shanghai Power bought 66 percent shares of K-Electric for Rs180 billion on Wednesday.

The company formerly known as Karachi Electric Supply Corporation was privatized in 2005 for a sum of Rs16 billion rupees to a Saudi-Kuwaiti group. In those days the US dollar valued at Rs 59.75 at the inter-bank market. Going by those rates the company was privatized for $270 million which would now value at Rs28 billion.

The general perception was that privatization will improve financial condition of the company. In 2009 the company was sold to private equity firm Abraj Group with management control, for Rs 361 million. The US dollar valued at Rs81 then. The deal would value at Rs38 billion today.

Abraj invested Rs100 billion in K-Electric. For that loans were taken from international organizations. Later, these international organizations invested in the company.

These investments extended its transmission line and improved production. As a result, the company reaped profits.

But the world had its eyes on the sole company which supplied electricity to a city of 20 million people. And so a Chinese company bought it for Rs180 billion. For now, K-Electric is taking permission from customers and investors to complete the sale deed. It is expected that arrangements for the takeover will complete by February.

 

 

 

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