KARACHI: A Turkish investor announced on Thursday its intention to buy more than 51 per cent shares and control of Tri-Star Power Ltd, a publicly listed electricity producer.

Aykut Çalikuu is a diversified investor with core expertise in e-commerce and the sale of locally sourced products in the Gulf countries. Its other areas of interest include clean energy and healthcare.

As for Tri-Star Power, the firm generates and distributes electricity on a rental basis to the customers belonging to the same industrial group.

Speaking to Dawn, an analyst involved in the proposed transaction said the company can be termed a captive power producer given its limited customer base.

The company signed a rental agreement with Image Pakistan Ltd, a related party, on July 1, 2021, to provide the textile maker with its power plant on a rental basis. The 10-megawatt plant is installed on the premises of Image Pakistan in SITE, Karachi.

The actual power production by the power plant is undeterminable because it generates electricity on demand. Before July 1, 2021, the company charged its electricity buyer on a per-unit basis. The share price of Tri-Star Power went down 7.48pc to Rs14.84 apiece. Going by the current stock price, the company is worth Rs222.6 m. The value of the targeted stake of 51pc amounts to Rs113.5m.

The firm has a large free float, which is the easily tradeable shares controlled by ordinary investors, as the sponsors hold only 21.6pc shareholding. No single shareholder controls a stake of 10pc or higher in the listed power producer, according to the announcement of intention released by Alpha Beta Core Solutions Ltd, which serves as manager to the offer.

“The power sector in Pakistan offers lucrative returns. Getting a sasti listed company would make any foreign company looking to invest in Pakistan happy,” said the analyst.

The show of interest will be followed by a due diligence exercise. If successful, the foreign company will strike a share purchase agreement with the local sponsors at a price that may be different from the going rate on the stock exchange.

But the subsequent tender offer to retail investors for 50pc of the free-float shareholding must be equal to, or higher than, the rate agreed between the buyer and the sponsors.

Published in Dawn, March 10th, 2023