KARACHI, Oct 4: The Privatization Commission is expected to issue sometimes next week a letter of acceptance (LoA) to Hasan Associates for the disinvestment of 73 per cent shares of Karachi Electric Supply Corporation.
Hasan Associates has agreed to match the highest bid for KESC at Rs1.65 a share after highest bidder Kanooz al Watan, a Saudi investors’ group, backed out of the deal in February this year. Hasan Associates is now joined by a new Saudi group Jomaih Holding Company based in Riyadh.
Under the arrangement, Hasan Associates is reported to have agreed to make a prompt payment of $100 million on receipt of LoA. The remaining amount would be paid in 14 days.
Market reports suggest that a management team headed by a German manager of a utility in Germany is being set in place. All other senior members of the management team will be Pakistanis. A 60-day schedule is being prepared to facilitate a step by step induction of the new owners in KESC after the payment of agreed money.
The KESC privatization has been lingering on for about nine months. It was put on auction on February 4 in which Saudi group Kanooz al Watan offered the highest bid of Rs1.65 a share. For some reasons, which were never explained officially, the Saudi group backed out of the deal. The Privatization Commission secretary was sent to Jeddah in vain to persuade the group. The deal with Kanooz al Watan was finally scrapped in June after confiscating the earnest money amounting to Rs100 million.
The second highest bidder was given an opportunity to match the highest bid, which was done with a change in complexion of the group. The matching highest bid has been discussed and debated at length in two meetings of the Privatization Commission Board and two meetings of the Cabinet Committee on Privatization headed by Prime Minister Shaukat Aziz.
Sources say that certain legal hitches have been solved which has paved way for the transfer of management.
