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All arrangements have been finalized for the bidding for 51 % - 73 % shares
of total issued and paid up share capital of Karachi Electric Supply
Corporation (KESC) on February 4, 2005 at 1145 hrs at Privatisation
Commission's Conference Hall at Islamabad under the supervision of Dr. Abdul
Hafeez Shaikh Federal Minister for Privatisation & Investment.
The bidding will take place in accordance with the approved and agreed
instructions to the bidders. The attorney/-authorized representative of each
qualified bidder will drop sealed bids in the bid box, which will be opened by
the present representatives of the print and electronic media. The results of
the bidding of KESC will be placed before the PC Board meeting the same after
noon for its recommendations for the approval of the CCOP.
Two parties i.e. i- Consortia of Hasan Associates (Private) Limited, Pakistan
including, a) Hasan Associates Private Limited (Lead Bidder); b) AKD
Securities & Safe Deposit Company Limited, Pakistan; c) Marine Services Group
Company Premier Mercantile Services (Pvt) Ltd., Pakistan; d) Independent Power
Corporation, UK; e) GE International Operations; f) ABB (Pvt) Ltd; and g)
Trans-Africa Projects, South Africa and ii-Kanooz Al Watan for Project, Saudi
Arabia includes: a) Kanooz Al Watan for Project (Lead Bidder); and Siemens are
in the final run for the bidding for KESC and they have submitted the Earnest
Money Rs.100 million each, Application Form and Power of Attorney to
Privatisation Commission required for being eligible for KESC bidding.
It will be a landmark transaction in the power sector, which will not only set
the scene for a rapid turn around of KESC but also for the privatisation of
other electric utilities and for significant investment in the infrastructure
of Karachi.
The Financial Advisor for KESC Pricewaterhouse Cooper made the efforts
undertaken during the past two years for the betterment of financial and
technical aspects and the steps taken to resolve most of the bidders concerns
and detailed the transaction structure and the measures for improving the KESC
condition. The potential bidders have completed the due diligence of the
transaction and have completed the review of bidding documents prior to
bidding.
The transaction structure involves the sale of between 51 % and 73 % of the
ordinary shares in KESC, with an
innovative rights issue of cumulative, redeemable, preference shares to
secure Rs 6 billion additional funding to support the continued turn around
at KESC. The privatisation plan builds on a major restructuring of the
finances and balance sheet of KESC by the Federal Ministry of Finance over the
last two years, the adoption of a long term regulatory framework by the
National Electric Power Regulatory Authority and significant improvements in
the financial and operational performance of the company under the current,
Army-led management.
The Government of Pakistan will retain a minimum 26 %
stake in KESC for the time being to ensure commitment as a measure of comfort
to the prospective buyer of the utility. In addition, the Asian Development
Bank has indicated its willingness to acquire a 6.7% stake alongside the
successful bidder and may also provide additional funding for the turn around.