Hub Power Company is sold
KARACHI: The three Dawood group companies: Cyan Limited, Dawood Hercules Corporation and Dawood Hercules Fertiliser, paid off around $65 million as the proceeds of cumulative acquisition of 169.74 million shares in Hub Power Company Limited.
The deal made earlier at the end of March this year was sealed, after the foreign majority shareholder in Hubco — the country’s largest Independent Power Producer (IPP) — stepped out, selling all of its strategic holding to the local conglomerates.
National Power International Holdings B.V, had entered into a `share sale-purchase agreement’ to divest its 17.44 per cent controlling stake in Hubco at a price of Rs31 per share. The off-market transactions on the Karachi Stock Exchange on Monday showed that a total of 190 million shares of Hubco had changed hands that day at Rs31, which at Rs90 to a dollar works out to $65 million. The National Clearing Company of Pakistan reported net foreign equity outflow of $69.4 million on Monday.
The National Power held 201.8 million shares, which were to be acquired by two major parties: The Dawood Group and the Allied Bank Limited. The former has made acquisition through three separate entities: Dawood Hercules Corporation 35.48pc shares; Dawood Hercules Fertiliser (wholly-owned subsidiary of Dawood Hercules Corporation) 102.26 million stock and Cyan (formerly Central Insurance Company) 32.3 million shares.
The other major buyer Allied Bank Limited, which has acquired 31m shares, is an Ibrahim Group company that already holds 44 million or 3.8 per cent of the Hubco stock.
Cyan Limited announced on Monday that ‘all regulatory consents and approvals’ were in place and the company was proceeding for acquisition of shares in Hubco.
It may be recalled that in the autumn of 2011, the other major foreign sponsor in Hubco, Xenel had called quits, divesting its entire shareholding of 140m shares (12.3 per cent) at price of Rs37 per share. That deal had resulted in outflow of $60 million.
At the time of project inception in 1994, the two sponsors cumulatively owned 34.9pc holding or 404m shares: International Power 20.4pc and Xenel 14.5 per cent.