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Dr. Abdul Hafeez Shaikh, Federal Minister for Privatisation & Investment
has announced in a statement issued here today that all arrangements have been
finalized for the bidding of Karachi Electric Supply Corporation (KESC) on
February 4, 2005 with the consent of the participating potential bidders.
Dr. Hafeez Shaikh has said that all bidders would be given level playing field
to ensure transparent and satisfactory bidding process. He further stated that
it would be a landmark transaction in the power sector, which would 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.
Initially there were three parties who were pre-qualified for KESC
bidding, which included 1. Consortia of Hasan Associates (Private) Limited,
Pakistan, 2. Consortia of Independent Power Corporation, UK and 3. Consortia
of Kanooz Al Watan for Project, Saudi Arabia. Now Consortia of
Hasan Associates (Private) Limited, Pakistan and Independent Power
Corporation, UK have joined as one Consortia, therefore, two parties 1.
Consortia of Hasan Associates (Private) Limited, Pakistan and 2. Consortia of
Kanooz Al Watan for Project, Saudi Arabia will participate in the bidding.
Consortia of Hasan Associates (Private) Limited, Pakistan includes 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 while the other Consortia of Kanooz Al Watan for Project, Saudi
Arabia includes a) Kanooz Al Watan for Project (Lead Bidder); and Siemens. Two
parties are in the final run for the bidding for KESC have submitted their
Earnest Money, Application Form and Power of Attorney to Privatisation
Commission required for being eligible for KESC bidding.