Shanghai Electric cancels $1.77bn deal with K-Electric

KARACHI: China’s state-owned Shanghai Electric Power (SEP) has officially terminated its long-pending $1.77 billion agreement with K-Electric, ARY News reported.

According to reports, the deal, which had been in limbo for several years due to regulatory and legal hurdles, involved Shanghai Electric acquiring a 66.40 percent majority stake in K-Electric from KES Power Limited.

In a formal announcement, Shanghai Electric confirmed that the agreement has now been cancelled and notified the Shanghai Stock Exchange of the decision.

The transaction, valued at $1.77 billion, had faced repeated delays as approvals from different regulatory authorities remained pending. With the termination, Shanghai Electric has formally withdrawn from its plan to purchase the controlling shares of K-Electric.

In October 2023, Shanghai Electric Power (SEP) made an offer of $1.77 billion again to acquire the sole power company in Karachi, K-Electric’s shares.

Shanghai Electric showed interest in acquiring the shares of K-Electric and made a new offer worth $1.77 billion.

The investment advisor of the Saudi group Shan Abbas Ashari told the media in Karachi today that the major shareholder – Al-Jomaih Power Limited of Saudi Arabia – hinted at selling its shares at the price of $2 billion.

Also Read: Shanghai Electric makes offer to acquire K-Electric again

Shan Abbas Ashari said that the deal with Shanghai Electric will be signed again. He added that SEP had made the $1.77 billion offer to own K-E many years ago which would be revised now.

The investment advisor of the Saudi group said that the electricity demand in Karachi should have reached 5,000 MWs. He added that the demand would be increased if all industries were shifted to the company’s grid.

Ashari said that Pakistan is the ideal country for making investments for Saudi Arabia and other Gulf countries due to the rapid increase in population as compared to Europe. He, however, said that the Saudi and Kuwaiti investors faced difficulties following the K-Electric deal.