KARACHI: The investment bank managing the attempt by a Turkish investor to buy more than 51 per cent shares and control of Tri-Star Power Ltd, a publicly listed electricity producer, said on Thursday it’s extending the deadline for making a public announcement of offer (PAO) by three months.

Alpha Beta Core Solutions Ltd said the due diligence process by the potential acquirer was still in process even though the initial period of 180 days for making the PAO ended on Sept 9.

Tri-Star Power generates and distributes electricity on a rental basis to customers belonging to the same industrial group through a 10-megawatt plant installed on the premises of Image Pakistan in SITE, Karachi.

The current management has mounted a legal battle to prevent the takeover by Aykut Çalikuu — a high-net-worth individual from Turkey with core expertise in e-commerce and the sale of locally sourced products in the Gulf — on the grounds that he was acting “in concert with others” and was “illegally accumulating” shareholding while indulging in share price manipulation.

As a result of the suit the management filed against the potential buyer, the Sindh High Court has ordered that the status quo be maintained in the matter.

A person involved in the transaction from the side of the potential buyer alleged the company’s management was “stonewalling” the takeover attempt in violation of the regulations. The actual power production by the power plant is undeterminable because it generates electricity on demand. Before July 1, 2021, the company charged its electricity buyer on a per-unit basis.

The financial accounts of the company for January-March said gas supplies remained suspended during the three months resulting in no revenue. Net profit in the first nine months of 2022-23 clocked in at Rs4.6 million, down 33.5pc from a year ago.

The Turkish investor formally approached the Securities and Exchange Commission of Pakistan (SECP) on March 20 against the target company for not providing the “relevant and material information” required for due diligence.

In a subsequent correspondence, seen by Dawn, the apex regulator of the corporate sector told the local power company on April 4 to “ensure meticulous compliance” with the takeover regulations and provide the potential acquirer with material information for due diligence.

The Turkish investor issued its intention to buy majority shares of Tri-Star Power on March 9. Within a week, the target company alleged that the potential acquirer was causing “undue movement” in the share price.

The power producer said its share price witnessed an increase of 531pc in eight months, which reflected the “manipulation by the acquirer either directly or indirectly through the persons acting in concert”.

It said the share price saw a “continuous declining trend” after the public announcement of intention. “The proposed acquirer is not a shareholder of the target company. He is a Turkish citizen… and does not even have an account with CDC (Central Depository Company),” it added.

The company further alleged that the acquirer has neither the means nor the net worth to undertake such a transaction and is “merely acting as a frontman on behalf of others in order to bypass the regulations”.

Published in Dawn, September 22th, 2023