Shanghai Electric Power Ltd (SEPL) has been seeking government support to facilitate the company in order to buy majority shares in KE electric (KEL).
On Monday, a delegation of SEPL lead by the company Chairman Wang Yundan met PM Shahid Khakan Abbasi in Islamabad and apprised him for the current status of acquisition process of buying a majority share in KEL—Dawn Reported.
However, the News International has reported that the company SEPL has withdrawn the offer again to buy KEL on Monday. According to KEL, “We have received a copy of the withdrawal of public announcement of intention for acquisition (directly or indirectly) of up to 66.40 percent of the voting shares of K-Electric Limited by Shanghai Electric Power Company Limited,” Said KE in a notice to Pakistan Stock Exchange.
But KEL and Arif Habib Ltd (AHL), informed that SEPL is interested in making the offer again in purchasing the stakes in KEL since the last announcement has been expired. This happened because the government was unable to announce multiyear tariffs and other approvals on time.
The deal is valued at $1.77 billion which could not be completed due to the time limit, however, according to the statement, “The acquirer continues to be fully committed to complete the transaction pending receipt of regulatory and other approvals. The acquirer shall make a fresh public announcement of intention to make the transaction in accordance with the prescribed formalities immediately WEF the expiry date.”
Hence, the transaction will be completed immediately after the receipt of remaining regulatory and other approvals. One of the major problems in completing the transaction is the Multiyear Tariff (MYT) for KEL which has to be decided by the National Electric Power Regulatory Authority (NEPRA).
Once, NEPRA performs its pending tasks, the Shanghai Electric will be able to buy majority shares in KE Electric, while the Ministry of Defence and the Ministry of Interior have already issue NOCs for selling majority shares to the Chinese Electric company.