April 04, 2024, Karachi: Engro Energy Limited, a subsidiary of Engro Corporation Limited, has recently inked a significant Share Purchase Agreement (SPA) with Liberty Power Holding (Pvt.) Limited and a consortium, marking the sale of its thermal energy assets portfolio.
This move reflects Engro’s strategic efforts to streamline its operations and optimize capital and resource allocation.
The consortium comprises Liberty Mills Limited, Soorty Enterprises, and Procon Engineering, operating under the Master Group of Industries umbrella. Engro’s decision to divest its thermal assets is part of a broader strategy aimed at enhancing efficiency and focusing on core business areas.
Under the terms of the agreement, Engro Energy will sell its entire 68.9% shareholding in Engro Powergen Qadirpur Limited (EPQL), 50.1% shareholding in Engro Powergen Thar (Private) Limited (EPTL), and 11.9% shareholding in Sindh Engro Coal Mining Company Limited (SECMC). The transaction values for each of these shareholdings are PKR 21.04 billion for EPTL, PKR 6.21 billion for SECMC, and PKR 7.5 billion for EPQL, subject to certain adjustments as stipulated in the definitive agreements.
Completion of the transaction is contingent upon various conditions, including obtaining corporate and regulatory approvals, as well as lender consents.
Engro Corporation initially ventured into the energy sector in 2008 by establishing Engro Powergen Qadirpur Ltd, a power asset aimed at utilizing flare gas to address Pakistan’s energy crisis. Over the years, the group has achieved significant milestones in the energy sector, including the development of Thar coal reserves and the expansion of mine operations under SECMC, along with the establishment of two 330 MW power plants under EPTL. These projects have not only contributed to alleviating energy shortages but have also maintained high standards of safety and environmental compliance.
Commenting on the SPA signing, Ghias Khan, President & CEO of Engro Corporation, emphasized the importance of periodically reassessing business portfolios to ensure alignment with strategic objectives. Khan highlighted that the agreement with Liberty presents new growth opportunities for both organizations, fostering innovation and sustained success.
Muhammad Ashraf Mukaty, Chairman of Liberty Group and President of Liberty Power Holding, expressed enthusiasm about the partnership, describing it as a historic milestone. Mukaty underscored Liberty’s commitment to expanding business operations and driving growth while contributing to the development of communities and the nation.
The sale of Engro’s thermal energy assets marks a strategic pivot for the corporation, enabling it to reallocate resources effectively and concentrate on its core competencies. As the energy landscape continues to evolve, such strategic maneuvers are crucial for organizations to stay agile and responsive to market dynamics.
