Daily Times

KARACHI: In a major development, the Dawood Hercules Corporation Limited (DHCL) has decided to sell its entire 14.91 percent stake and transfer the management control of the Pakistan’s largest independent power producer Hub Power Company (Hubco) to a strategic buyer.

DHCL is an investment holding company with diversified holdings in energy and foods. Company investments include a 37 percent ownership of associated company Engro Corporation Limited and a 14 percent stake in the Hubco.

In a notification sent to Pakistan Stock Exchange (PSX) on Friday, the DHCL said that the company is contemplating to disinvest 100 percent of its shareholding in Hubco through a strategic sale with transfer of management control.

The company secretary at DHCL, Shafiq Ahmed said a special transaction committee comprising of two independent directors and one non- executive director of the board has been constituted for the purposes of evaluating the proposed divestment.

“This committee will appoint financial and legal advisors to assist and advise on feasible options for the purposes of the proposed divestment. The proposed divestment will be finalized after appropriate evaluation based on applicable financial, tax and legal advice, and its approval by the board of directors; and is subject to the procurement of all applicable regulatory and corporate approvals, finalization of relevant documentation(s) as may be required”.

Hubco shares fell more than 3.5 percent in PSX on Friday after the announcement of its main sponsor Dawood Herculues that it is contemplating a potential sale of its entire shareholding in the company.

In 2012, DHCL and its affiliates collectively acquired 16.42 percent stake comprising 190 million shares in Hubco following the divestment of its 17.44 percent shareholding in Hubco by National Power International Holdings BV.

The company (Hubco) has been persistently pursuing government of Pakistan to have the circular debt issue resolved which has created a severe liquidity crunch for the power industry. The company is also working with the Independent Power Producers Advisory Council (IPPAC) for the resolution of the circular debt and for creation of a smooth operating environment for the power sector.

The Hubco is the first Independent Power Producer (IPP) in the country with a combined installed power generation capacity of over 1600 MW and the company generates approximately 10 percent of the country’s electricity. Hub Plant, situated at Mouza Kund, Hub in Balochistan, supplies electricity to the national grid. Narowal Plant is also an RFO-fired, engine based, combined cycle power station, located at Mouza Poong, Narowal in Punjab. The Company also holds 75 percent controlling interest in Laraib Energy Limited which owns and operates a run of the river hydel power plant near the New Bong Escape, 8 km downstream of Mangla Dam in Azad Jammu and Kashmir.

Published in Daily Times, July 1^st , 2017.