KARACHI: K-Electric Limited, the leading power generation and supply company, has announced plans to raise Rs12 billion through the issuance of Sukuk.
The decision was made public on Wednesday, highlighting the company’s ongoing financial strategies to support its operations.
In an official communication to the Pakistan Stock Exchange (PSX), K-Electric stated that its Board of Directors, in a meeting held on February 9, 2022, reviewed business updates and approved the issuance of K-Electric-rated, secured, and privately placed listed Sukuk of up to Rs12 billion. The Sukuk issuance will also include a green shoe option of up to Rs4 billion, contingent on completing all statutory requirements, obtaining necessary regulatory approvals, and fulfilling requisite corporate actions.
“The proceeds from the Sukuk will primarily be utilized to finance the company’s permanent working capital requirements, as well as ongoing routine capital expenditures (Capex) and operational expenditures (Opex),” K-Electric stated in its announcement.
Shanghai Electric’s Interest in K-Electric
Meanwhile, Shanghai Electric Power Company Limited (SEP) continues its efforts to acquire a controlling stake in K-Electric. The company previously informed the stock exchange on December 29, 2021, that it had received a fresh public announcement of intention (PAI) from Shanghai Electric Power Company Limited to acquire up to 66.40% of K-Electric’s voting shares. This acquisition remains subject to regulatory and other necessary approvals.
K-Electric confirmed that this public announcement of intention was officially notified to its Board of Directors on December 29, 2021. The acquisition, if completed, is expected to have significant implications for the company’s future operations and strategic direction.
K-Electric’s Financial Strategy and Future Outlook
The issuance of Sukuk aligns with K-Electric’s broader financial strategy to ensure liquidity and sustainability in its operations. By leveraging Islamic financial instruments such as Sukuks, K-Electric aims to optimize its capital structure and maintain a steady cash flow for essential investments.
As the only integrated power utility in Karachi, K-Electric continues to explore avenues to strengthen its financial position while remaining committed to improving power generation and distribution infrastructure through strategic partnerships and investments.