ISLAMABAD, Sept 29: The Privatization Commission has invited expressions of interest (EoIs) from qualified utility operators and strategic and financial investors to acquire up to 73 per cent equity in Karachi Electric Supply Corporation with management control.
A Privatization Commission announcement issued here on Monday said the Asian Development Bank had indicated that it would take an equity interest of 7.67 per cent from the available 73 per cent shares of KESC. And at least two new multinational groups are preparing to bid for the rest of the available shares in the utility.
The interested parties have been asked to furnish their EoIs along with a brief profile of the potential investor and the required non-refundable processing fee no later than October 31, 2003.
The interested parties with relevant credentials will be dispatched a request for statement of qualifications (RSoQ) starting on October 8. Early submission of EoIs will allow parties maximum time for completion of their RSOQ requirements, the announcement said. The statement of qualifications (SoQ) would be received by the Privatization Commission till December 15.
A preliminary information memorandum containing more detailed information and guidance on lodgement of the EoI is available from the Privatization Commission and will be provided upon request free of charge. The sell-off process is expected to be completed in January next year.
The ADB will purchase 7.67 per cent shares at the rate that emerges in the open bidding of KESC. Two companies — AES of USA and ABB of Germany — have already submitted EoIs for the purchase of KESC, but interest shown by some more companies has led the government to invite fresh EoIs.
The KESC’s loans have already been converted into equity by the government a year ago with the aim to ensure the smooth privatization of the company. The new buyer would, however, have to invest around $400 million in the company for transmission and system improvement, sources said.
They said KESC’s financial adviser Richard Gladill of Pricewaterhouse Coopers (PwC) had also done the groundwork to attract more buyers for the company and had interacted with the potential bidders in Germany and London a couple of months ago.
The financial adviser has also informed the government that two new groups — Siemens of Germany, and consortium of Kanooz Group and International Power Company (IPC) — were interested in buying KESC. A couple of months back the federal government steering committee for restructuring and privatization of KESC set a November 21 deadline for the sell-off of the company. The deadline, however, had to be extended till January 2004 to meet some basic formalities.