UBAI: Abraaj Group has agreed to sell its majority stake in Pakistan's K-Electric to Shanghai Electric Power Co (SEP) for $1.77 billion, the emerging market-focused private equity firm said on Sunday. K-Electric is Pakistan's biggest electricity company, supplying power to 2.5 million customers in and around Karachi, the country's biggest and wealthiest city. Shanghai Electric Power, a subsidiary of the State Power Investment Corporation of China, is engaged in the generation and transmission of electricity, and the operation and maintenance business in the energy service sector, it said. Commenting on the exit, Abraaj Group Founder and Group Chief Executive Arif Naqvi said, "Today marks a milestone... as we enter into a definitive agreement to divest our stake in a high-performance business as market leader to a strategic buyer who is fully committed to continuing this success story into the future." The transaction is the largest M&A deal in Pakistan in a decade, and comes at a time of heightened Chinese interest in investing in the South Asian nation as part of its "One Belt, One Road" initiative. "The K-Electric transaction only marks the beginning of SEP's cooperation with Abraaj and we look forward to further collaboration between the two parties in many other areas in the future," Wang Yundan, Shanghai Power's chief executive, said in a statement. Chinese companies' interest in Pakistan is growing after China announced energy and infrastructure projects worth $46 billion in the South Asian nation last year, with a view to opening a trade corridor linking western China with the Arabian Sea.
The Dubai based Abraaj Group agreed to sell its majority shares in K-Electric to China’s state-backed Shanghai Electric Power Company with a transaction of US $ 1.77 billion.