KARACHI: K-Electric said on Thursday the rumour about Engro Corporation and Shanghai Corporation acquiring a stake in K-Electric is “incorrect and speculative.”
“Kindly note that we have not been notified of any transaction that has been entered with any entity regarding acquisition of K-Electric,” said company’s Director Finance Muhammad Rizwan Dalia in a stock notice.
Similarly, Engro Corporation also issued a statement to clarify that it has not made any decision to buy a shareholding in K-Electric.
“(Re) the news item circulating in certain sections of print and electronic media stating that Engro Corporation has shown interest in a bid to purchase K-Electric, the company clarifies that it has neither expressed interest nor participated in any bid to purchase K-Electric,” the statement said.
The overall trading volume shot up 59% on Thursday mainly because of the increased trading activity in the stock of K-Electric. K-Electric shares constituted over one-quarter of the total traded shares on the stock market.
According to Topline Securities, K-Electric led volumes with 110 million shares while the stock price went up 2.2% to close at Rs8.81 per share.
In an interview with The Express Tribune conducted last month, Engro Corporation President Khalid Siraj Subhani had remained noncommittal. “Engro is not involved in the K-Electric transaction right now,” he had said.
However, he had hastened to add that it “makes sense” for Engro Corp to acquire distribution companies. “It is not out of our domain. Whether we acquire a distribution company or not, only time will tell,” he noted.
During the earlier part of the day, word had it that Shanghai Corporation would buy 51% while Engro Corporation would acquire a 15% stake in the electricity distribution company.
According to a note issued by Arif Habib Limited, the government had privatised K-Electric with 73% transfer of ownership to a consortium comprising of Al Jomaih Group of Saudi Arabia and National Industries of Kuwait back in November 2005. A further change of ownership in the entity occurred in September 2008 when Abraaj Capital acquired a majority stake (69%) alongside complete management control.
The principal activities of K-Electric include generation, transmission and distribution of electricity, it said. “It has a consumer base of approximately 2.5 million customers comprising residential (47.4%), commercial (7.9%), industrial (32.3%) and public sector (12.4%),” it added.
Courtesy : Express Tribune