KARACHI: Abraaj Group, the Dubai-based private equity majority owner of Pakistan’s K-Electric, on Monday has finally confirmed its exit from Pakistan. Muhammad Rizwan Dalia, Director Finance & Company Secretary, K- Electric said the company has received the notification from its majority shareholder, KES Power Limited regarding its divestment program. “We would like to notify that Abraaj is evaluating the possibility of divesting (directly or indirectly) its shareholding in K-Electric which will be subject to a prescribed sale process, due diligence and execution of binding documentation including receipt of applicable regulatory approvals and satisfaction of other conditions precedent” said Abraaj group in a notification. Abraaj Group holds 66% indirect stake in K-Electric through KES Power Limited, a holding company, in which Abraaj Group had acquired majority stake in 2009 investing $360 million. Currently, KES Power holds 69.2% interest in K-Electric. According to the reports, Golden Concord Holdings Ltd, Shanghai Electric Power Co, Engie SA and an investment fund are the potential bidders for the stake. China Southern Power Grid is also planning to acquire stakes in K-Electric. Abraaj Group had mandated Citi group to evaluate strategic options of the divestment. Abraaj plans to reduce its 66 percent stake, held with two other investors, through share sales to 26 per cent in a phased manner and then sell the remainder with management control. Meanwhile, investors in Pakistan equity market rejoiced the decision as KE remained volume leader on KSE-100 index following the announcement of Abraaj’s intention to sell its stake in the company. Recently, China’s state-backed Shanghai Electric Power said that it is bidding to acquire a stake in Pakistani utility K-Electric Ltd, which has a total market value of $2.3 billion. “Our company has embarked on preliminary work on the acquisition of a stake in K-Electric. We have not entered into any exclusive negotiations yet and the size of the stake has also not been firmed up,” Shanghai Electric said in a statement on the Shanghai stock exchange on other day. Industry experts believe that Abraaj group has failed to run K-Electric smoothly, that’s why the sponsor has decided to leave such a profitable venture adding that investment plans of K-Electric about $2.2 billion to improve the generation capacity and upgrading the transmission and distribution networks may be disturbed due to current management’s exit. The infrastructure of the power distribution remained outdated and the Abraaj group did not focus on restructuring of it that led to major breakdowns in the city during the heat wave in summer, 2015. The experts were of the view that government’s plan to start 18 power projects under China Pakistan Economic Corridor (CPEC) worth of over $27 billion and China’s state-backed Shanghai Electric Power’s interest in K-Electric hint some connection behind the development. K-Electric’s Director Communication Sadia Dada didn’t respond to Daily Times’ quires regarding the above said developments.