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Abraaj mulls strategic options on Pak utility firm

Dubai, June 30, 2014

Dubai-based Abraaj Group, a leading investor operating in global growth markets, said it has mandated Citi to evaluate strategic options for its indirect stake in K-Electric, a vertically integrated power utility based in Pakistan.

Abraaj said it had acquired a controlling stake, through one of its funds, in KES Power, the majority shareholder of K-Electric in 2009.

Since Abraaj?s acquisition, significant equity has been injected into K-Electric, resulting in a distinct improvement in the company's operations, notably through the addition of enhanced efficient generation capacity (over 1,000MW of new capacity since FY 2009) and a reduction by 10 percentage points in the transmission and distribution losses as of March this year, said the Dubai-based equity in a statement.

As a result of Abraaj's active ownership model and the clear value creation plan that was set in place, K-Electric's financial performance improved, with the company posting positive ebitda and net income of $276 million and $70 million respectively in FY 2013, compared to negative ebitda of $87 million and a net loss of $197 million in FY 2009, it added.

According to Abraaj, the Pakistani utility firm had reported profitability for the first time in 17 years in FY 2012.

In addition to enhancing the operational effectiveness of the Company, K-Electric has been successful in embedding sustainability into its new business model, it stated.-TradeArabia News Service




Tags: Pakistan | Abraaj | Utility |

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