KARACHI, Oct 15: The Dubai-based Abraaj Capital on Wednesday said it had entered into an agreement to acquire a stake in the biggest shareholder of Karachi Electric Supply Company.

The decision followed a government move to grant a subsidy to KESC for clearing Pepco, Hubco and PSO bills.

Although the deal was made public on Wednesday, it was common knowledge that Abraaj was effectively managing KESC affairs after acquiring stakes in the offshore KES, to circumvent the three-year cap on Aljomaih to offload its shares.

According to a press release issued by Abraaj, which manages $5 billion of funds across the region, it will buy new shares in KES Power Limited, acquiring 50 per cent stake and the company’s management control. KES Power in turn owns 71.5 per cent of KESC.

The capital injection will be used to finance new equipment at KESC’s aging facilities, boost generating capacity and bring in management expertise, the announcement said.

“Turning KESC around will demand time and, above all, a prerequisite that all stakeholders play their part. Discussions and agreements are being finalised with local, provincial and federal authorities,” said Farrukh Abbas, CEO of Abraaj Capital Pakistan.