Minority shareholders of an offshore holding company that owns the majority of power utility K-Electric have been ordered by a Pakistani court to withdraw their petition to include major shareholder IGCF on the board, the IGCF said on Friday. was prevented from happening.
Infrastructure and Growth Capital Fund SPV21 (IGCF) told Reuters it had filed a case against the request in a Cayman Islands court and received a positive ruling. Reuters was not immediately able to confirm the court decision.
K-Electric’s (KE) holding structure is widely seen as an obstacle to its acquisition by China’s state-owned Shanghai Electric, a deal that has been delayed for years by regulatory and legal hurdles in Pakistan.
According to a court document provided by the IGCF, the Grand Court of the Cayman Islands ordered the minority shareholders to “discontinue” their proceedings in the Sindh High Court (SHC) against the majority shareholder. , which prevented the IGCF from appointing its nominees to the KE. Board of Directors.
IGCF owns a 53.8% shareholding in Cayman Islands-registered KES Power Limited (KESP), which in turn owns 66.4% of KE.
In October 2022, the SHC issued an injunction to prevent any change in KE’s board of directors due to a suit filed by minority shareholders in KESP. There are three vacancies on the Board of Directors.
“We are confident that this order will remove the doubts raised by the SHC order regarding the rights of the IGCF to appoint its nominees to the KK board. And all Stakeholders need to focus on providing affordable and reliable electricity to Karachi,” the IGCF said in a statement.
KESP – minority shareholders in Saudi- and Kuwait-based company Denham Investment – did not immediately respond to a request for comment. KE declined to comment.
A minority shareholder of KESP, Al Jumia Power, declined to comment. “As the court process is still ongoing and has given OS time for further hearings and appeals, we will hesitate to comment,” Al Juma told Reuters.
KE is the sole electricity generator, transmitter, and distributor for Pakistan’s largest city Karachi and its adjoining areas, and the only listed electricity supplier in Pakistan. It was privatized in 2005, and has a market capitalization of Rs 53 billion ($195 million).
IGFC was previously owned by the now defunct Abraaj Group. It was acquired in 2022 by AsiaPak Investments, a private investment firm with operational assets in Pakistan and Hong Kong.
In July, the IGCF also initiated legal proceedings to acquire direct ownership of shares in KE by dissolving KESP.
The IGCF declined to comment directly on whether it supported Shanghai Electric’s long-stalled bid for KE.
“We are in favor of any effort that will lead to cheaper electricity for Karachi and oppose any transaction that will add to the hardships of Karachi’s consumers,” he said.
In June, Shanghai Electric reiterated its commitment to the deal, which was worth about $1.77 billion in 2016 but could change. The Government of Pakistan owns 24.4 percent of K Electric.
