ISLAMABAD: Defence Ministry has given security clearance to Shanghai Electric Power (SEP) for the acquisition of K-Electric.
SEP received no-objection certificates from the Interior and Defence Ministries paving way for its 66.4 percent majority stake acquisition in K-Electric. The no-objection certification from the defence ministry was provided on the assurance that power supplies would be provided round the clock to defence installations, reported a local newspaper.
Due to the expiration of amended implementation agreement, the privatisation commission (PC) has directed the power division to ink a new agreement to guarantee supply to defence installations.
Abraaj Group, the current owner of K-Electric, refused to provide the sale purchase agreement to the PC when requested.
A major obstacle has been removed on part of the defence ministry regarding the deal, which took place last year when SEP acquired a 66.4 percent majority stake in K-Electric for US$1.77billion.
The seller Abraaj Capital has been determined to close the deal at the earliest and its officials also met Prime Minister Shahid Khaqan Abbasi last month to enlist his support.
Another issue creating hindrances in the conclusion of K-Electric’s acquisition is the settlement of outstanding receivables on part of the company, which till now remains unresolved, said Secretary Power Division Yousaf Naseem Khokhar.
National Transmission and Despatch Company (NTDC) and Sui Southern Gas Company (SSGC) have said that K-Electric owes around US$1.24billion in form of electricity cost, gas and late payment surcharges. Abraaj group has expressed willingness to pay the principal amount only.
