Textile consortium bids for 68.9 percent stake in Engro’s gas-fired power plant

KARACHI: A consortium of textile firms has offered to buy a 68.9 percent stake in Engro Powergen Qadirpur Ltd (EPQL), a gas-fired power plant, the company said on Monday.

EPQL, a unit of Engro Energy Ltd, which is owned by Engro Corp, said it had received a firm intention from the consortium, led by Liberty Mills Ltd, to acquire 223 million voting shares of the company.

“It is hereby informed that Engro Powergen Qadirpur Limited has received firm intention from Liberty Mills Limited, Zain Ashraf Mukaty, Temoor Ashraf Mukaty, Ahmed Ashraf Mukaty, Soorty Enterprise (Private) Limited, Affinity Capital (Private) Limited, Najeeb Malik, Nadeem Malik and Shahzad Malik, through the Manager to the Offer, Arif Habib Limited, to acquire control or 223,050,000 voting shares (68.89 percent) of EPQL, beyond the thresholds prescribed under Section 111 of the Act,” EPQL said in a statement to the Pakistan Stock Exchange (PSX).

The offer price was not disclosed. Engro Corporation through Engro Energy Limited holds a 68.9 percent stake in EPQL.

The consortium also plans to buy another 15.56 percent stake, or 50.375 million shares, from the public shareholders of EPQL, the statement said.

EPQL operates a 217 megawatt (MW) power plant in Qadirpur, Ghotki district, in Sindh. The plant uses permeate gas, a by-product of gas processing, as fuel and has a combined cycle configuration, comprising one gas turbine, one heat recovery system generator and one steam turbine.

The textile consortium includes Liberty Mills, Soorty Enterprise, Affinity Capital and three individuals from the Mukaty family. Affinity Capital is part of the Master Group of Industries, a diversified conglomerate with interests in textiles, automobiles, engineering and energy sectors.

The deal is subject to regulatory approvals and other customary closing conditions, the statement said.

JS Global in a note said the EPQL has a book value of Rs15 billion (Rs 46/share) as of September 2023. "The transaction size of 223 million shares at current prices will cost Rs7 billion ($25 million).” As per EPQL’s latest financial results, the company posted a net profit of Rs2.51 billion in 2023.

Engro Corp, one of Pakistan's largest conglomerates, has interests in fertilizers, foods, energy, petrochemicals and infrastructure sectors.