By Staff Reporter
KARACHI: Shanghai Electric Power Co. has abandoned its $1.77 billion bid to acquire a controlling stake in K-Electric Ltd., Pakistan’s sole listed power utility, citing a deteriorating business environment and the seller’s failure to secure required approvals.
The decision ends a nearly decade-long pursuit that highlights the complexities of dealmaking in Pakistan’s troubled power sector.
The Chinese utility’s board approved the termination on September 9, 2025, scrapping a 2016 agreement to buy up to 66.4% of K-Electric from Abraaj Group. The deal stalled due to regulatory hurdles and liquidity constraints driven by Pakistan’s mounting circular debt crisis in the power industry. Despite Shanghai Electric reaffirming its commitment as recently as June 2023, after withdrawing its offer the previous year, the transaction failed to progress.
“On September 9, 2025, the company convened the fifth meeting of the ninth board of directors and reviewed and approved the proposal to terminate and write off the equity acquisition of KE company in Pakistan,” Shanghai Electric said in a statement. “Given that the counterparty has consistently failed to meet the conditions precedent for closing and the changes in the business environment in Pakistan have rendered this transaction no longer aligned with the company’s international development direction, the company has decided to terminate this major asset purchase.”
The statement added that Shanghai Electric adhered to all relevant laws and regulations throughout the process. It cited the seller’s failure to meet conditions outlined in Article 4.1 of the Share Purchase Agreement, allowing termination under Article 4.8.
K-Electric, privatized in 2005, is the only generator, transmitter, and distributor of electricity for Karachi and its surrounding areas. It remains Pakistan’s lone listed utility.
The 66.4% stake targeted by Shanghai Electric is held by Cayman Islands-registered KES Power Ltd. The government owns 24.36%, with the remainder held by institutional investors and the public. KES Power is controlled by another Cayman entity, IGCF SPV21 Ltd., which holds a 53.8% stake, while Saudi and Kuwaiti investors own the rest.
IGCF SPV21 is ultimately owned by Infrastructure and Growth Capital Fund L.P. (IGCF), formerly managed by Abraaj Group until its 2019 collapse following the arrest of its founder for misappropriating investor funds. Tensions between KES Power’s minority shareholders, holding 46.2%, and IGCF SPV21 emerged in October 2022. That was when Sage Venture Group Ltd., a British Virgin Islands-registered entity under AsiaPak Investments Ltd., became IGCF’s general partner after a court-approved sale of Abraaj assets during its global liquidation.
Sage Venture and AsiaPak are ultimately owned by Shaheryar Chishty, a Pakistani businessman with a background in international banking and interests in the country’s power sector. As IGCF’s general partner, Sage Venture manages the fund on behalf of its limited partners.
Copyright © 2021 Independent Pakistan | All rights reserved
