KARACHI: The Shanghai Electric Power Company has formally expressed its intentions to acquire K-Electric.

According to a letter sent by the Shanghai Electric to the Pakistan Stock Exchange(PSX), it will acquire 66.40% percent stake in the firm and will directly or indirectly purchase 18.3 billion ordinary shares of the power utility company.

“We are disclosing material information with respect to receipt of copy of public announcement of intention for acquisition of up to 66.40% voting shares of K-Electric Limited (directly or indirectly) by Shanghai Electric Power Company Limited, subject to due diligence and execution of definitive agreements,” said K-Electric Director Finance and Company Secretary Muhammad Rizwan Dalia, in a notification to the Exchange.

Arif Habib Limited has been given the duty to manage the offer. Public announcement will be published in national Urdu and English newspapers on September 2.

The news came a week after its current owner UAE-based Abraaj Group plans to divest its stake in K-Electric and informed the Pakistan Stock Exchange (PSX). Abraaj Group’s stake in the company has been valued at $1.5 billion.

The majority shareholder in the power company, The Abraaj Group, disclosed on Monday that it was “evaluating the possibility of divesting (directly or indirectly) its shareholding in K-Electric.”

The government of Pakistan owns the remaining 24 percent stake in K-Electric.

Financial position of the company Karachi Electric Supply Corporation (KESC) improved after the acquisition of Abraaj Group as the made profit in 2012 for the first time in seventeen years.

The company was then rebranded as K-Electric.

The Chinese state-backed company was vying for K-Electric along with Chinese clean-energy group Golden Concord Holdings Ltd.; French utility Engie SA and at least one investment fund.