ISLAMABAD / SINGAPORE: Chinese state-backed firms are frontrunners to buy a $1.5 billion controlling stake in K-Electric, sources said, as they bet the benefits of a Beijing-led economic corridor will trump the risks of investing in Pakistan.
State-backed Shanghai Electric Power (600021.SS) and China Southern Power Grid are among Chinese firms leading the pack of about half a dozen bidders in K-Electric KELA.KA, one person familiar with the matter said.
Shanghai-headquartered Golden Concord Holdings is also among the bidders, as are some local Pakistani and other companies, according to people who know about the process.
Chinese companies’ interest comes after China last year announced energy and infrastructure projects worth $46 billion in the South Asian nation, with a view to opening a trade corridor linking western China with the Arabian Sea. “The China-Pakistan Economic Corridor (CPEC) is the main driver, with a lot of Chinese funding flowing into Pakistan,” said one person aware of the K-Electric deal.
No guarantee: Dubai-based private equity firm Abraaj Group, whose 66 per cent stake in K-Electric has a market value of about $1.5 billion, is seeking final bids for its stake by the end of August.
Sources cautioned that although talks between the parties are advanced, there is no certainty of a deal being clinched.http://tribune.com.pk/story/1169551/cpec-development-silk-road-powers-bids-1-5b-utility-stake/
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