Lucky Cement-led consortium shortlisted for GEPCO bid
KARACHI: Lucky Cement, along with other major corporate entities, has been shortlisted to conduct due diligence on Gujranwala Electric Power Company Limited (GEPCO) as part of the government’s privatization process.
According to a disclosure submitted to the Pakistan Stock Exchange (PSX), Lucky Cement said it had formed a consortium with Hub Power Holdings Limited, Kohat Cement Company Limited and Metro Ventures (Private) Limited.
The consortium submitted an Expression of Interest (EOI) and Statement of Qualification for the proposed acquisition of a 51% to 100% equity stake, along with management control, in GEPCO.
The consortium, along with other interested parties, has been pre-qualified by the Privatisation Commission and shortlisted to undertake financial, technical and legal due diligence of GEPCO.
Lucky Cement clarified that the consortium has not entered into any binding commitment with any party for the acquisition of GEPCO’s equity.
The company said any potential commitment would only be made after the satisfactory completion of due diligence, receipt of all required corporate and regulatory approvals, and a determination that the proposed transaction is commercially viable.
Under the applicable privatisation framework, the equity stake in GEPCO will ultimately be offered through a competitive bidding process.
Lucky Cement said that, at the current stage, the consortium’s intention is limited to undertaking a comprehensive due diligence exercise and evaluating the commercial viability of the potential acquisition.
The government is pursuing the privatisation of electricity distribution companies (DISCOs) primarily to reduce financial losses and the burden on the national exchequer.
Many DISCOs have faced persistent problems of electricity theft, high distribution losses, weak bill recoveries and operational inefficiencies. These problems contribute to the accumulation of circular debt and require government subsidies and financial support.
The Finance Division has identified DISCO inefficiencies, poor collections and distribution losses as major contributors to the power-sector circular debt. Finance Division
A second major objective is to bring private-sector investment, management expertise and modern technology into the power distribution system. The government expects private participation to improve billing and recovery systems, reduce electricity losses, modernize ageing distribution infrastructure and improve the quality and reliability of electricity services.
Under the proposed model, investors acquiring DISCOs would also assume management control, with the companies continuing to operate under regulatory oversight. Ministry of Privatisation
The privatisation programme is also part of Pakistan’s broader economic reform agenda and commitments under the IMF programme.
The government wants to reduce the recurring fiscal burden of loss-making state-owned enterprises, attract domestic and foreign investment and make the power sector financially sustainable.
The Finance Ministry has described DISCO privatisation as a core component of the IMF’s Extended Fund Facility programme, while the Privatisation Commission says the process is intended to improve efficiency, strengthen service delivery and reduce losses
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