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Abraj Capital to buy 36% shares of KESC - Naveed Yaseen - 10-16-2008 04:25 AM
By Irfan Aligi
KARACHI: Abraj Capital has entered an agreement to acquire a stake in the Karachi Electric Supply Company (KESC), the sole power provider to Karachi.
Talking to Daily Times, KESC Communication Head Qashif Effendi said that Abraj, which manages US $5 billion in funds across the region, has signed the share purchase agreement and has notified the Karachi Stock Exchange (KSE) on Wednesday. Thus Abraj will own a 50-percent stake and management control of KESC with 35.8 percent of KESC’s total shares. The remaining shares and participation in KESC’s operations will remain with Saudi Arabia’s Al-Jomaih Group and Kuwait’s National Industries Holding, KESC’s existing owners and shareholders.
The capital injection will be used to finance new equipment at KESC’s aging facilities, boost generating capacity and bring in management expertise, claimed Effendi.
According to a statement issued here, Abraj Capital Pakistan Chief Executive Officer (CEO) Farrukh Abbas said that turning KESC around will demand time and a prerequisite for improvement is the need for all stakeholders to play their part. In depth discussions and agreements are being finalized, notably with local, provincial and federal authorities. These agreements will be critical to the future of the company, the safekeeping of its employees and all the people of Karachi, he said.
Every side has a part to play. Abraj’s role includes providing very substantial funding and, critically, identifying and supporting a competent and professional management team with an established track record in the power sector, said Abbas. He added that he wanted to stress on Abraj Capital’s commitment to the future of KESC’s 17,000 employees, who often work under very difficult circumstances. This massive project is critical to the lives of all the people of the city and touches the economic viability of the entire country.
KESC was incorporated in 1913 and is the only power utility that serves the electricity needs of city and its surrounding areas. The utility has some 2.2 million customers and a licensed network spanning 6,000 square kilometers.
The utility runs its power operations through a combination of self-generation and power import from independent power producers, WAPDA and the National Transmission and Distribution Company (NTDC).
KESC’s total estimated power supply capacity is approximately 2,344 MW and it is listed on all three stock exchanges of the country.
http://www.dailytimes.com.pk/default.asp?page=2008\10\16\story_16-10-2008_pg12_1