Saturday December 09, 2023

Pakistani transport magnate buys significant stake of K-Electric

Sage is also set to complete its acquisition of the Ithmaar GP shareholding

March 22, 2023
A representational image of K-Electric logo. — Twitter/File
A representational image of K-Electric logo. — Twitter/File

LONDON: A British Virgin Islands (BVI) registered special purpose company, Sage Venture Group Limited (Sage), has completed the acquisition of significant stakes in the Infrastructure Growth and Capital Fund LP (IGCF or the Fund), which holds an indirect material stake in K-Electric Limited (K-Electric). These transactions were authorized in proceedings at a court in the Cayman Islands, according to court documents.

In a legal document addressed to Moonis Alvi, CEO of K-Electric, it has been confirmed that the BVI registered Sage, wholly owned by AsiaPak Investments Limited (AsiaPak), has completed the acquisition of the IGCF General Partner shareholding from AIML.

The document says that Sage is also set to complete its acquisition of the Ithmaar GP shareholding. The document says: “The ultimate beneficial owner of Sage and AsiaPak is Shaheryar Arshad Chishty who is a Pakistani national. Following the acquisition of IGCF GP shareholding, the IGCF GP has decided to update certain directorships as it relates to K-Electric. The new IGCF directors to the KE board will include Shaheryar Arshad Chishty.”

It adds: “Further, Sage has privately agreed to acquire certain LP stakes from existing LPs. The composition of the LPs in the Fund remains private and subject to Cayman Islands disclosure regulations, consistent with the past disclosure to K-Electric and the Securities & Exchange Commission of Pakistan. Mark Skelton, Managing Director of Alvarez and Marsal Europe LLP, is an existing IGCF GP director and will remain a director of certain Fund investments, including K-Electric, on behalf of the Fund. Alvarez and Marsal will continue to act as advisers to the Fund in winding down its investments for the benefit of the Fund LPs.” K-Electric had published a clarification in October last year after Geo and The News revealed developments at the Cayman Islands. K-Electric had informed the Pakistan Stock Exchange: “Further to the disclosure made by K-Electric Limited (K-Electric) on October 18, 2022, K-Electric has now been informed that changes have been consummated involving IGCF General Partner Limited (IGCF GP), being the fund manager, and the Infrastructure and Growth Capital Fund L.P. (Fund), being the owner of the Fund assets. In particular, controlling interests in IGCF GP and certain limited partnership interests in the Fund have been acquired by Sage Venture Group Limited, a British Virgin Islands registered special purpose company wholly owned by AsiaPak Investments Limited. The Fund’s indirect non-controlling shareholding in K-Electric however remains unchanged.” The Fund is a Cayman Island registered private investment fund with numerous institutional investors that is managed by the IGCF GP and holds multiple assets, including an indirect non-controlling shareholding in K-Electric. Further, for the sake of clarity, the Fund does not have a controlling interest in K-Electric nor a controlling position on the K-Electric Board of Directors.

One of the liquidators of Abraaj — namely Deloitte based in Cayman and the appointed administrators of IGCF, namely Alvarez and Marsal (A&M) based in London — had agreed to a deal which was presented to the Cayman Court for approval under seal.

Immediately after Sage completed its transaction in the Cayman Islands, the minority shareholders of KESP decided to approach the Sindh High Court and obtained a stay order preventing any change in K-Electric’s Board of Directors. The appointment of the proposed new IGCF directors to K-Electric, including Shaheryar Arshad Chishty, a transport magnate in Pakistan, and Darin Baur, has been held up by an action filed in the Sindh High Court by Al-Jomaih Power and Denham Investments Ltd. This has left K-Electric unable to fill the casual vacancies and with an incomplete Board of Directors. The News has obtained a letter written by Shaheryar Arshad Chishty, CEO of AsiaPak, to Chaudhary Salik Hussain, Federal Minister for BOI. The letter has listed out numerous shortcomings of K-Electric, which have resulted in high electricity prices in Karachi and also presented AsiaPak’s plan to increase availability of electricity and reduce its cost. A source at K-Electric said that the government appears oblivious to the sufferings of Karachi’s consumers and seems to have abdicated its responsibility. He said that while preventing K-Electric’s new indirect shareholder from trying to help improve K-Electric, the govt does not seem to have any plan of its own. The source said: “It is mind boggling that in the midst of a national political and economic turmoil, K-Electric’s stakeholders are not coming together to focus on solving Karachi’s problems”.