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ISLAMABAD: Ten companies have qualified to bid for the acquisition of Faisalabad Electric Supply Company (Fesco), while the Privatisation Commission has rejected a Chinese firm for failing to submit documents in English.
The commission approved the list of prequalified bidders on Friday. Adviser to the Prime Minister on Privatisation Muhammad Ali chaired the meeting.
The government plans to sell between 51% and 100% of Fesco’s shares. The company supplies electricity to Faisalabad and surrounding areas and remains one of the country’s profitable power distribution companies.
K-Electric did not appear on the final list of eligible bidders.
A Privatisation Commission official said KE failed to provide audited financial statements for the past three years. The company said the accounts could not be finalised because the National Electric Power Regulatory Authority (Nepra) had not approved its Multi-Year Tariff.
KE later withdrew its Expression of Interest to avoid disqualification.
A KE spokesperson confirmed the withdrawal and said the company’s audited financial statements were still pending because of the tariff issue.
“However, we remain committed to pursuing opportunities that maximise value for our stakeholders,” the spokesperson said.
KE has also faced a separate dispute with the Pakistani government. Its Kuwaiti and Saudi shareholders have filed a $2 billion damages claim over the blocked sale of their 66% stake to Shanghai Electric.
A senior Privatisation Commission official said the arbitration case was not the reason for KE’s exclusion.
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The commission also rejected Jiangxi Electric Power Construction Company Limited.
The Chinese company is a subsidiary of Power Construction Corporation of China, a Fortune Global 500 company.
Officials said Jiangxi submitted its documents in Mandarin despite the requirement to provide information in English.
The commission gave the company two weeks to submit the documents again. However, Jiangxi did not meet the requirement, officials said.
Three Turkish companies have made it to the next stage of the Fesco privatisation process.
They are:
The Privatisation Commission said Fesco’s financial adviser recommended 10 parties for prequalification.
The successful bidders will now move to the next stage. This includes access to the Virtual Data Room, where they can conduct detailed due diligence before submitting financial bids.
Several leading Pakistani business groups have also qualified.
A consortium led by Nishat Mills is among the bidders. The group includes Nishat Mills, Nishat Power, Nishat Chunian, Lalpir, Pak Elektron and Kohinoor Energy.
The consortium is linked to businessman Mian Muhammad Mansha, who also participated in the previous Fesco bidding process in 2015-16.
Maple Leaf Cement and Kohinoor Textile, associated with the Saigal family, have also qualified.
Other Pakistani bidders include Engro Energy, owned by the Dawood family, and Sapphire Fibres, associated with the Abdullah family.
Hub Power Holdings, linked to the Habibullah Khan family, and Lucky Cement, associated with the Mohammad Ali Tabba family, are also on the list.
Shirazi Investments, which has interests in the automobile sector, has qualified as well.
Artistic Milliners, owned by the Yaqoob family, completes the list of 10 prequalified parties.
The latest development follows a decision by the Cabinet Committee on Privatisation (CCoP) to restructure three power distribution companies ahead of their sale.
Under the plan, the government will transfer assets worth Rs911 billion to new buyers against liabilities of Rs648 billion.
This would give buyers net positive equity of around Rs263 billion.
The government will retain assets worth Rs257 billion, mainly land, along with liabilities of about Rs11 billion.
For Fesco, the government approved the transfer of Rs290.5 billion in assets against liabilities of Rs226.5 billion.
The arrangement would give the buyer equity of around Rs64 billion.
The government will retain about Rs73 billion worth of Fesco land.
Fesco recorded distribution losses of around 8%, or about Rs1 billion, during the last financial year.
The CCoP also approved an increase in Fesco’s authorised share capital to Rs100 billion.
It directed the Power Division to establish a new company with an authorised capital limit of Rs250 billion.
The government had set the end of August as the deadline for the management of the three power companies to separate core land from non-core assets.
The non-core land would then go on lease to the new buyers.
Officials, however, expect the deadline to be missed.
The prequalification of 10 bidders marks the next major stage in the planned sale of Fesco. The government now faces the task of completing due diligence, restructuring assets and preparing the companies for the final bidding process.
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