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Friday, May 24, 2024

Shanghai Electric Extends Deadline for K-Electric Acquisition

Shanghai Electric extends K-Electric acquisition deadline amid regulatory hurdles, commitment to $1.77 billion deal, internal approvals, Arif Habib Limited, Pakistan Stock Exchange, cross-border acquisition challenges, regulatory framework intricacies.

Shanghai Electric Power Company Limited (SEP) has prolonged the deadline for acquiring 66.40% of K-Electric Limited’s (KEL) total issued and paid-up capital by 90 days. The announcement came through Arif Habib Limited (AHL), the manager to the offer, which informed the Pakistan Stock Exchange (PSX) about the extension. The initial deadline for the public announcement of the offer was January 21, 2024.

AHL stated that the involved parties have been working on obtaining necessary regulatory approvals in both China and Pakistan. While progress has been made, certain approvals are pending, and the parties cannot complete the transaction until they are received. AHL assured that efforts would continue to expedite the required approvals and processes.

In October of the previous year, SEP reaffirmed its commitment to acquiring 66.40% of KEL shares for $1.77 billion. There were indications that a revised offer might be presented, potentially raising the deal’s value to $2 billion.


Challenges in Regulatory Approvals Impact K-Electric Deal

The deadline for Shanghai Electric Power Company Limited’s intention to acquire a significant stake in K-Electric Limited (KEL) has been extended by 90 days. Arif Habib Limited, the manager overseeing the offer, revealed that regulatory approvals, both in China and Pakistan, have been progressing, but certain conditions are yet to be met. Internal approvals from various line ministries and departments are among the pending requirements, and these processes are outside the acquirer’s control.

Despite the extended deadline, the parties involved in the transaction are committed to expediting the necessary approvals and processes. The deadline for the public announcement of the offer is now extended until April 20, 2024. SEP’s initial commitment to acquire a substantial stake in KEL for $1.77 billion was renewed in October, hinting at a potential increase in the deal’s value.

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K-Electric Acquisition: Navigating Regulatory Hurdles

Shanghai Electric’s quest to acquire a significant stake in K-Electric faces delays as the deadline for the intention to acquire has been extended by 90 days. Regulatory approvals, both in China and Pakistan, have been partially secured, but certain conditions are yet to be met. The acquirer, in collaboration with KEL, remains committed to securing the necessary approvals despite facing challenges in obtaining internal clearances from line ministries and departments.

The extended deadline, now set for April 20, 2024, marks the continued efforts to finalize the deal, initially valued at $1.77 billion. The hurdles in the regulatory process highlight the intricacies involved in cross-border acquisitions, emphasizing the importance of aligning with both Chinese and Pakistani regulatory frameworks.