The results of the sealed bidding will be placed before the PC Board that will meet in the same afternoon for its consideration for approval of the Cabinet Committee on Privatisation (CCoP).
Two groups are in the run for acquiring KESC shares. One is a consortium of Hasan Associates (Private) Limited, Pakistan that has Hasan Associates Private Limited (Lead Bidder); AKD Securities & Safe Deposit Company Limited, Pakistan; Marine Services Group Company Premier Mercantile Services (Pvt) Ltd, Pakistan; Independent Power Corporation, UK; GE International Operations; ABB (Pvt) Ltd; and Trans-Africa Projects, South Africa and the second group includes-Kanooz Al Watan for Project, Saudi Arabia including Kanooz Al Watan for Project (Lead Bidder); and the Siemens.
Both the groups have submitted Rs 100 million earnest money each, application form and power of attorney to Privatisation Commission, required for being eligible for the bidding.
The Commission said that the KESC bidding would be a landmark transaction in the power sector, setting the ground for rapid turn around of the KESC and also expediting the privatisation process for other electric utilities and for significant investment in the infrastructure of Karachi.
The financial advisor for the KESC, Pricewaterhouse Cooper made the efforts during the past two years for the betterment of financial and technical aspects and the steps taken to resolve most of the bidders' concerns and detailed the transaction structure and the measures for improving the KESC condition. The transaction structure involves the sale of between 51 and 73 percent of the ordinary shares with an innovative rights issue of cumulative, redeemable, preference shares to secure Rs 6 billion additional funding to support the continued turn around in the KESC.
The privatisation plan is built on a major restructuring of the finances and balance sheet of the KESC. The Nepra adopted a long-term regulatory framework that resulted in significant improvements in the financial and operational performance of the corporation.
The government will retain a minimum 26 percent stake in the KESC to ensure commitment as a measure of comfort to the prospective buyer of the utility.
In addition, the Asian Development Bank (ADB) has indicated its willingness to acquire a 6.7 percent stake along side the successful bidder and it may also provide additional funding for the turn around.