KAPCO bids for wind power producer, HUBCO eyes coal miner

KARACHI: Kot Addu Power Company Limited (KAPCO) said on Tuesday that it had submitted a bid to buy a majority stake in Tenaga Generasi Limited (TGL), a wind power producer in Sindh.

KAPCO, which operates a 1,600 megawatt (MW) multi-fuel power plant in Punjab, said in a notice to the Pakistan Stock Exchange (PSX) that the discussions were at a preliminary stage and any deal would be subject to regulatory and shareholder approvals.

“Discussions are at the preliminary stage and any potential transaction would be subject to, among others, execution of definitive documents, regulatory approvals and internal approvals including KAPCO shareholders’ approval,” the company said.

TGL, a subsidiary of Dawood Lawrencepur Limited (DLL), owns a 49.5 MW wind power project in KhutiKun area, District Gharo, Sindh. The company was incorporated in Pakistan in 2004 by Malaysia's Tenaga Nasional Berhad, but was later acquired by DLL in 2008.

KAPCO, which was incorporated in 1996, sells electricity to the state-owned Pakistan Water and Power Development Authority (WAPDA) under a power purchase agreement (PPA) that expired in October 2022. The company has been out of operations since then.

Meanwhile, Hub Power Company Limited (HUBCO), one of the country’s largest independent power producers (IPP), said on Tuesday that its board had authorised it to enter negotiations and execute definitive agreements for the proposed acquisition of shares of Sindh Engro Coal Mining Company Limited (SECMC) held by a “potential seller”.

"The Board of Directors of The Hub Power Company Limited has authorized the company to enter into negotiations and execute definitive agreements for the proposed acquisition of shares of Sindh Engro Coal Mining Company Limited held by a potential seller," the company said in a notice to the PSX.

The completion of this proposed transaction is subject to the necessary corporate and regulatory approvals and consents, and execution of definitive documents, it said. HUBCO, which saw its profit jump by over 93 percent to Rs18.32 billion in the first quarter of fiscal year 2023-24 that ended September 30, 2023, did not disclose the name of the potential seller or the value of the deal.

Analysts attribute this growth to the addition of TEL, ThalNova, and Prime International to HUBCO’s portfolio, as well as the 28 percent year-over-year depreciation of the Pakistani rupee against the US dollar. SECMC is a coal producer operating Pakistan’s first open-pit lignite mine in Block II of Tharparkar area in Sindh. The company currently has an annual mining capacity of 7.6 million tonnes.