The Privatisation Commission board has prequalified 10 of the 12 parties that expressed interest in buying Faisalabad Electric Supply Company (Fesco) — leaving out K-Electric, which pulled out, and a Chinese firm that was ruled non-compliant (Dawn).
The board, chaired by Adviser to the Prime Minister on Privatisation Muhammad Ali, approved the list on Friday.
Withdrew, not disqualified
The distinction matters, and both outlets are clear on it: K-Electric withdrew its expression of interest. It was not thrown out.
KE’s stated reason is that its audited financial statements are not yet available, because the National Electric Power Regulatory Authority has not finalised the company’s Multi-Year Tariff. The two papers differ on how many years of accounts were missing — Dawn says two, the Express Tribune, citing a commission official, says three.
Both papers add the same characterisation, and both source it to officials rather than to KE: the Express Tribune, citing the commission official, says KE withdrew to avoid disqualification; Dawn, citing informed sources, says it withdrew “rather than risk being disqualified”. KE’s own account stops at the missing accounts. The Tribune quotes a KE spokesperson saying the delay is “beyond our control” and that the utility remains “committed to pursuing opportunities that maximise value for our stakeholders” (The Express Tribune).
That leaves the one bidder with actual power distribution experience outside the race for a distribution company.
The Chinese bidder
The second party out is Jiangxi Electric Power Construction Company, a subsidiary of Fortune Global 500 firm Power Construction Corporation of China. It filed its expression of interest in Mandarin rather than English, and — per the Tribune — did not refile in English within a two-week window it was given.
Who is in
The 10 break down as three Turkish firms and seven Pakistani entries, several of them consortiums.
Turkish: Aktor Elektrik Enerji Yatirimlari, Genvera Enerji (Celik Group) and Cengiz Enerji Sanayi ve Ticaret.
Pakistani — seven entries, two of which are joint bids counted once: (1) Engro Energy; (2) Sapphire Fibres; (3) Hub Power Holdings, Lucky Cement and Metro Ventures bidding together; (4) Shirazi Investments (Atlas group); (5) Maple Leaf Cement and Kohinoor Textile bidding together; (6) the Pakgen consortium of Nishat Mills, Nishat Power, Nishat Chunian, Lalpir, Pak Elektron and Kohinoor Energy; and (7) Artistic Milliners.
Three plus seven is the stated 10 — a count the Tribune independently confirms by calling Artistic Milliners “the 10th firm in the final list”. As the Tribune notes, none of the local groups has power distribution experience, though several are in generation.
What is on the block
The government wants to sell 51 to 100 per cent of Fesco, the Tribune reports — a figure Dawn’s account does not carry.
The Tribune also reports that the Cabinet Committee on Privatisation last week approved a restructuring plan transferring Rs911 billion of assets across three Discos against Rs648 billion of liabilities, leaving buyers Rs263 billion of net equity. For Fesco alone: Rs290.5bn of assets against Rs226.5bn of liabilities, or Rs64 billion of equity, with the state retaining Rs73bn of Fesco land. Fesco’s distribution losses were 8 per cent last fiscal year.
Next
The 10 now get access to the Virtual Data Room for buy-side due diligence before financial bids. Neither paper gives a bid date or any published timeline for the next stage.
Fesco is one of three Discos in the Batch-I privatisation, Dawn reports. The other two are separate transactions: Gepco, which drew 11 expressions of interest, most of them from parties also in the Fesco and Iesco races; and Iesco, whose EoI deadline is 21 September. The Tribune’s account does not cover either.
KE is not out of the privatisation programme altogether. Dawn reports the utility intends to bid for a different Disco as part of a consortium with Shahryar Chishti’s AsiaPak Investments, one of KE’s major shareholders — a detail the Tribune does not carry.
Unresolved: whether Nepra settles KE’s tariff, and on what terms — and whether the end-August deadline for separating Fesco’s core from non-core land, which the Tribune says is likely to be missed, delays the sale.
