ISLAMABAD:Ten domestic and international investor groups have entered the race for IESCO, seeking 51% to 100% shareholding with management control as the government moves ahead with the first batch of its distribution company reforms aimed at improving efficiency and reducing power-sector losses.
The Privatisation Commission received 10 Expressions of Interest for Islamabad Electric Supply Company, moving the proposed transaction into the evaluation and prequalification phase.
The response includes three Turkish companies and a number of major Pakistani corporate groups, providing a mix of domestic and international participation in the proposed privatisation.
The Turkish companies are Aktor Elektrik Enerji Yatırımları San. ve Tic. A.Ş., Genvera Enerji A.Ş. and Cengiz Enerji Sanayii ve Ticaret A.Ş.
Engro Energy Limited is among the Pakistani applicants. An Artistic Milliners-led consortium comprises The Lake City Holdings, Fatima Capital Limited, Din Ventures (Pvt) Limited and Fazal Cloth Mills Limited.
A Hub Power Holding Limited-led consortium includes Lucky Cement Limited, Kohat Cement Limited and Metro Ventures (Private) Limited.
Sapphire Fibers Limited, Novatex Limited and Bestway Cement Limited have also submitted EOIs.
Another consortium, led by Hasnaat Brothers Construction Co. (Pvt) Limited, comprises Dhilal Holding Group, Pak Steel, Bio-Labs (Pvt) Limited and Farid Steel Casting (Pvt) Limited.
The prospective investors are seeking a controlling stake in IESCO, with the Privatisation Commission stating that the proposed shareholding ranges from 51% to 100%, together with management control.
For electricity consumers, the government has presented DISCO reform as a means of addressing operational inefficiencies, distribution losses and weaknesses in customer service.
The Privatisation Commission has said that the proposed IESCO transaction is intended to improve operational efficiency, modernise distribution infrastructure, strengthen customer services and reduce distribution losses.
The government expects improved efficiency and stronger commercial management to contribute to greater financial sustainability in the power sector and, over time, support more reliable and affordable electricity services.
IESCO is one of three distribution companies included in Batch-I of the government’s DISCO privatisation programme. FESCO and GEPCO are the other two companies included in the first batch.
The government has used domestic and international roadshows to attract investors, with the latest participation showing interest from both Pakistani corporate groups and Turkish energy companies.
Adviser to the Prime Minister on Privatisation and Chairman Privatisation Commission Muhammad Ali described the response as an important milestone and said the participation reflected investor interest in Pakistan’s electricity distribution sector.
The government will now examine the EOIs and Statements of Qualification against the approved prequalification criteria.
Applicants that meet the requirements will be prequalified and move to the next stage, where they will be given access to IESCO’s Virtual Data Room.
The VDR will enable prequalified investors to undertake detailed due diligence before the transaction advances further.
The Privatisation Commission said it would remain engaged with prospective investors during the due-diligence process and work towards an equitable, transparent and predictable post-privatisation regime.
The IESCO transaction therefore remains at the investor qualification stage, with the final structure and outcome dependent on subsequent phases of the privatisation process.
The Commission said 10 parties had already been prequalified for FESCO, while 11 EOIs for GEPCO were under evaluation.
With 10 EOIs received for IESCO, the government’s first batch of DISCO reforms is now progressing simultaneously across the three targeted distribution companies, subject to the respective prequalification and transaction processes.
