Shanghai Electric Power Company has decided to terminate its offer to acquire up to 66.4 per cent of K-Electric Ltd due to changes in Pakistan’s business environment, it emerged on Wednesday.
KE is the only electricity generator, transmitter, and distributor for Karachi and its adjoining areas, and the only listed electricity supplier. It was privatised in 2005. Shanghai Electric Power had agreed to buy a controlling shareholding in KE from Abraaj Group back in 2016 for a sum of $1.77 billion.
The transaction never materialised because the seller failed to obtain the required approvals from different authorities and liquidity constraints as a consequence of mounting circular debt in the country’s power sector. In June 2023, Shanghai Electric reiterated its commitment to the deal.
In a statement issued a day ago, the Chinese company said: “On September 9, 2025, the company convened the fifth meeting of the ninth board of directors and reviewed and approved the proposal to terminate and write off the equity acquisition of KE company in Pakistan, agreeing to terminate this major asset purchase.”
It added that since the planning of the “major asset purchase”, the company had strictly adhered to relevant laws, regulations, and normative documents, actively promoting the various tasks involved in this major asset purchase.
“Given that the counterparty has consistently failed to meet the conditions precedent for closing and the changes in the business environment in Pakistan have rendered this transaction no longer aligned with the company’s international development direction, after careful study and analysis, in order to effectively safeguard the interests of the company and all its shareholders, the company has decided to terminate this major asset purchase.
“As KES energy company has failed to meet the conditions precedent stipulated in Article 4.1 of the Share Purchase Agreement, Shanghai Electric is entitled to terminate the agreement in accordance with Article 4.8 of the Share Purchase Agreement,” the statement read.
The company had withdrawn its offer last year as well.
Who owns K-Electric?
Cayman Islands-registered KES Power Ltd owns 66.4pc shares in KE. The government of Pakistan controls 24.36pc shares in K-Electric, while the rest is owned by institutional investors and the general public.
KES Power is then owned by another Cayman Islands-based firm, IGCF SPV21 Ltd, which controls 53.8pc shares in the holding company of the Karachi utility. The rest of the shareholding in KES Power belongs to Saudi and Kuwaiti investors.
IGCF SPV21 Ltd, in turn, is “ultimately owned” by Infrastructure and Growth Capital Fund L.P. or IGCF, which is the fund that Abraaj Group managed until its eventual collapse following its chief’s arrest for misappropriating investors’ money in 2019.
The tussle between KES Power’s minority shareholders controlling 46.2pc stake and SPV21 Ltd with 53.8pc ownership began in October 2022. That was the time when Sage Venture Group Ltd — a British Virgin Islands-registered special-purpose company of AsiaPak Investments Ltd — became “general partner” of IGCF following a court-sanctioned sale of certain assets of Abraaj Investment Management, which was undergoing official liquidation internationally at the time.
A general partner brings in capital from investors and manages a private equity fund on behalf of its limited partners. The new general partner, as well as its parent company, are ultimately owned by Shaheryar Chishty, a Pakistani citizen who previously worked in international banking and now owns multiple companies in the country’s power sector.
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