K-Electric has withdrawn from the privatisation process for Faisalabad Electric Supply Company (Fesco) after it was unable to provide audited financial statements for the past three years.
The Privatisation Commission has prequalified 10 firms to move forward with the Fesco bidding process. K-Electric was not included after withdrawing its expression of interest.
Pending NEPRA Tariff Keeps K-Electric Accounts Unaudited
K-Electric said its financial statements remain unaudited because the National Electric Power Regulatory Authority (NEPRA) has yet to finalise the company’s Multi-Year Tariff.
The power utility said the delay is beyond its control and confirmed that its decision to withdraw was directly linked to the unavailability of audited accounts.
Despite exiting the Fesco process, K-Electric said it remains interested in opportunities that can create value for its stakeholders.
10 Firms Prequalified For Fesco Sale
The Privatisation Commission received 12 expressions of interest and approved 10 bidders after reviewing their eligibility.
The prequalified bidders include three Turkish companies — Aktor Elektrik Enerji Yatirimlari, Genvera Enerji and Cengiz Enerji — along with several major Pakistani business groups.
Engro Energy, Sapphire Fibres, a Hub Power Holdings-led consortium, Shirazi Investments, Maple Leaf Cement, Kohinoor Textile, a Pakgen-led consortium and Artistic Milliners are among the firms moving to the next stage.
A Chinese company, Jiangxi Electric Power Construction Company Limited, was declared non-compliant after failing to resubmit its documentation in the required English language.
Fesco Sale Moves Into Due Diligence
The government plans to sell between 51% and 100% of Fesco, along with management control. The successful bidder will gain access to the Privatisation Commission’s Virtual Data Room to conduct detailed due diligence before submitting a financial offer.
Fesco has assets worth around Rs290.5 billion against liabilities of Rs226.5 billion, leaving approximately Rs64 billion in net equity. The federal government will retain land valued at around Rs73 billion.
Fesco is considered one of Pakistan’s more efficient state-owned distribution companies, with distribution losses reported at around 8% during the last fiscal year.
K-Electric Exit Leaves Experienced Bidder Out
K-Electric’s withdrawal is significant because it is currently the only Pakistani company with direct experience of operating a privatised electricity distribution business.
The government is seeking private ownership and management control of stronger Discos as part of its wider power-sector reform programme. With K-Electric out of the Fesco race, the remaining bidders will now face the challenge of completing due diligence and presenting competitive offers.