Abraaj is near to making a deal with the government of Pakistan that would be permitting the private equity firm to sell its 66 per cent stake in K-Electric to a Chinese Group, as per the reports of Financial Times.
The report mentions that 2 years before, the firm’s sale price to Shanghai Electric Power was quoted at nearly $1.8 billion, which would have earned Abraaj nearly $450 owing to the debts owed by K-Electric.
Now the agreement, which had been put up by the regulatory approvals, is being reconsidered, likely at a lower price, as per the senior people at Abraaj and people who are close to the deal.
The suggested sale is still probably to be the biggest source of recovering funds for the Dubai-based Abraaj’s creditors and would also be providing some money to the investors, as informed by the people.
One of the executives of Abraaj said that there is more momentum than ever witnessed before, as reported by the Financial Times.
Abraaj has once enjoyed the status of being the Middle East’s biggest buyout fund with nearly $14 billion of assets under management. It was sent to its downfall after the investors accused the company of misusing funds. The firm and its Pakistani-born founder—Arif Naqvi have negated any such allegations of wrongdoings.
The reports mention that the firm owes more than $1.1billion in debt and has been in negotiations since then to sell the assets to recover. In the present months, Mr Naqvi has been using his links with the new government of Pakistan for salvaging the transaction, even though it has come too late to save Abraaj itself.
There has been a significant increase in the number of transactions between Pakistani firms and Chinese interests. The Chinese infrastructure firms are constructing power plants, roads, building ports and railways as an initiative which is anticipated to see nearly $65 billion in spending over the span of the next five years.