china electric power news: sep, abraaj group ink ke deal
shanghai electric power co., ltd. (sep), a listed subsidiary of state power investment corporation (spic) and dubai-based abraaj group, signed an agreement on the purchase of 66.4 percent stake of the pakistan-based k-electric limited (ke) in beijing lately, which marks a significant milestone in sep鈥檚 acquisition of ke.
karachi is pakistan鈥檚 largest economic center. ke is the key power supplier to karachi and the surrounding regions and also pakistan鈥檚 only vertically-integrated power company engaged in generation, transmission and distribution. operating five power plants with a total installed capacity of 2,243 mw, ke has 69 grid stations and 21,817 sub-stations, with 2.5 million customers and a coverage area of 6,500 km2. in 2015, ke鈥檚 peak load reached 3,200 mw.
ke was established in 1913 and is a listed company in pakistan. abraaj is ke鈥檚 controlling shareholder. as of the end of fy2015, ke has total assets of usd 3.6 billion and recorded revenue of usd 1.88 billion and net profit of usd 280 million for fy2015.
over the course of the ke transaction, spic conducted various workshops on the feasibility of the transaction. spic chairman wang binghua met with arif naqvi, founder and ceo of abraaj, in beijing to discuss the transaction and further co-operation between the two parties, and he also traveled to pakistan to meet with the local high-level government officials and conducted site visits to ke facilities. sep organized multiple trips to pakistan with a number of professional due diligence teams to perform detailed due diligence on ke in an all-round manner and had in-depth discussions with ke management.
the transaction has gone through the corporate decision-making procedures and will be completed after regulatory approvals are obtained in both countries.
sep鈥檚 acquisition of ke is in line with china鈥檚 鈥淏elt and road鈥?initiative. it is a significant move by sep to implement spic鈥檚 strategy of international development and a solid step in realizing 鈥淐orner overtaking鈥? the transaction will also contribute significantly to the china鈥揚akistan economic corridor.