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Offline Honda 125

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KEL -- K-Electric Limited
« Reply #-1 on: October 16, 2008, 09:32:35 AM »
All about KESC!!!
« Last Edit: January 22, 2016, 12:49:42 PM by M&M »

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KEL -- K-Electric Limited
« Reply #-1 on: October 16, 2008, 09:32:35 AM »

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Re: KESC -- Karachi Electric Supply Company
« on: October 16, 2008, 09:32:59 AM »
Abraaj takes stake in KESC
 
Will invest $350m in power utility

Thursday, October 16, 2008
By Saad Hasan

KARACHI: The Saudi investor-led holding company, which owns majority shares in Karachi Electric Supply Company (KESC), finally announced on Wednesday that it is handing over 50 per cent stake along with management control to Abraaj Capital.

In a statement to Karachi Stock Exchange, KES Power, the holding company, said new shares will be subscribed to Abraaj which will become its key shareholder. “We understand that funds raised from this subscription will be invested in KESC from time to time,” it said without specifying the amount or number of shares issued.

This capital injection of around $350 million will go into KESC for enhancement of generation capacity and improvement of transmission and distribution system, people close to the deal told The News. Saudi Arabia’s Al Jomaih Group and Kuwait’s National Industries Holding, KES Power’s existing owners, will remain as shareholders but the money invested by Abraaj will not go to them.

The announcement came a day after the government’s Economic Coordination Committee (ECC) made changes in share purchase agreement of KESC. Some amendments were also made in an implementation agreement with the power utility.

“As per the changes, KESC will be allowed adjustment of complete cost of fuel in its tariff,” he said, adding an earlier 4 per cent cap on escalation in cost of gas and furnace oil has been removed. “It was important as it resulted in creation of a circular debt.” Also, he said KESC will now cut power of those state-owned entities, which are not paying their bills. “Under a previous agreement power of government installations could not be severed.”

Government has also responded to the demand of Karachiites by passing on the benefit of cheap hydro power to the consumers, he said. KESC, which supplies power to Karachi and its suburbs, meets more than 25 per cent demand by buying power from WAPDA, which uses a mix of hydro and thermal generation, making end electricity cost relatively cheaper than all thermal-based production.

While consumer tariff of all categories has been equalised throughout the country, he said, it will not free KESC from the responsibility of bringing down distribution losses. “NEPRA has fixed some targets and KESC will be penalised if it fails to meet those.”

CEO Abraaj Capital Pakistan Farrukh Abbas said, “Turning KESC around will demand time and above all, a prerequisite that all stakeholders play their part. In-depth discussions and agreements are being finalised, notably with local, provincial and federal authorities.” A separate statement released from Dubai quoted him further, “These agreements will be critical to the future of the company, the safekeeping of its employees and all the people of Karachi.”

KES had acquired 71.5 per cent shares of KESC during its privatisation in 2005. Since then the power supply situation has deteriorated critically, at times leading to large protests. Financial and technical woes of KESC have worsened as losses have soared to Rs9.9 billion during July-March 2007-08 from Rs8.2bn recorded in same period of previous year.

Two power projects of 220MW and 560MW will now be commissioned by the new management in the coming months. As many as 11 grid stations were to be completed by September 2008. Only two have been installed in past as many years, work on both of which started before privatisation.

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Re: KESC -- Karachi Electric Supply Company
« Reply #1 on: October 16, 2008, 09:34:58 AM »
Protest against increase in power tariff
 
Thursday, October 16, 2008
By our correspondent

KARACHI: A number of shopkeepers and people related to different businesses protested on Wednesday against the latest increase in power tariff by the Karachi Electric Supply Corporation (KESC).

Protesters said that they will not pay electricity bills of KESC with the increased tariff as it is not economically viable to run businesses with such exorbitant increases in power rates.

Anjum Nisar, President Karachi Chamber of Commerce and Industry (KCCI), Jawed Bilwani, senior vice-president KCCI and Muhammad Ali, vice president KCCI pacified the protestors and requested them to be patient. However, they assured them that KCCI would support their cause and will knock on every door to get the power tariff reduced.

The office-bearers unanimously stated that any change in tariffs by KESC or any other concerned agency should not be made without taking into confidence the representatives of trade and industry, as they are the main stakeholders and consumers.

um@ir

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Re: KESC -- Karachi Electric Supply Company
« Reply #2 on: October 30, 2008, 01:50:32 PM »
Abraaj goes public with some of its juicy secrets


KARACHI: The mystery surrounding the new owners of KESC, Karachi’s beleaguered power supply utility, has finally been unraveled. In a rare show of plain speaking, the top boss of Abraaj Capital with his 40 expensive executives, has made startling written confessions which may stun the nation.

In response to 35-questions sent to Abraaj/KESC’s new management, Mr Farrukh Abbas, the Chief Executive Officer of Abraaj Capital (Pak) and Mr. Naveed Ismail the Chief Executive Officer of KESC, have sent a 28-page document answering all the questions sent by The News, explaining and confirming what has so far remained part of a vicious whispering campaign in cool and cozy drawing rooms.

For instance these top executives admit that Mr Farrukh Abbas is a relative of President Asif Ali Zardari. “Mr Abbas is not directly related to the Zardari family, but is indeed through marriage,” his written response to The News states, but quickly adds: “At no time has any personal relationship played a part in Abraaj’s involvement in KESC....Abraaj spent six months doing due diligence of this deal and no favours were sought by Abraaj during the course of its negotiations with the Government of Pakistan and none were granted outside the normal course of commercial discussions aimed at reviving KESC for the benefit of all stakeholders.”

Another frank admission is that the Group marketing and Communication Head of Abraaj/KESC, Mr Qashif Effendi, is also related to the Zardari family. Is this correct, Mr Abbas was asked. “They are distantly related but that relationship has no impact on the business, nor has it played any role in Mr Effendi’s known career growth,” the written response says.

Yet another shocker comes when the company chief admits that the new Chief Financial Officer of KESC, Mr Jalil Tareen, is a distant cousin and a good friend of Mr Shaukat Tareen, Prime Minister’s Adviser on Finance but adds: “He has obviously been hired entirely on his own merits as he also happens to have a superb track record as a highly seasoned UK-qualified chartered Accountant and senior manager in Pakistani local and multi-national businesses.”

Abraaj is a middle-east based company with over US$7.5 billionin management funds and has been operating in several countries. Its investors are predominantly from the Gulf and wider Middle East and increasingly from markets as wide as US, Asia and Europe and its management says it has an clean track record of transparent and self-regulatory conduct.

Yet the manner in which the Abraaj Group has taken over the control of KESC is highly complicated and it would take some real experts to determine how they have been allowed to run a company with 17,000 employees when they do not own one share, either of KES Power or KESC, as of today.

According to the detailed answer regarding ownership of shares, this is the exact explanation provided to The News by Mr Farrukh Abbas. It is reproduced in toto so that experts can decipher the real situation.

The question sent to Abraaj was the following: Has the transfer of 51 per cent shares between Al-Jomaih Group (KES Power) and Abraaj Capital been completed. If so when was it done?

The answer: It is important to note that there is no transfer of shares taking place in the transaction. Abraaj will subscribe for new shares in KES Group, the holding company that currently owns 71.5 per cent of KESC. As a result of this subscription for new shares, Abraaj will end up owning 50 per cent of the issued share capital of KES Power, and therefore will indirectly own 35.75 per cent of KESC. All of the capital (i.e. funds) used for the purchase of KES Power Shares will remain in KES Power and will then be injected into KESC (this is what is meant by capital injection). The total amount to be injected equals US$361 million, all of which will go directly into the business of KESC. This exactly equal the amount that has been invested in KESC by the existing shareholders Al Jomaih Group and NIG, who will continue to hold the same number of shares as before in KES Power, but will be diluted down to 30 per cent and 20 per cent ownership respectively in KES Power. As part of the agreement between Al-Jomiah and Abraaj, Abraaj will have full management control of KESC.

These top level connections to the political leadership of the country apart, the Abraaj management has already acquired the reputation of an arrogant, no-nonsense set up which does not care about the consumers of KESC or the Karachi political leadership, an attitude never seen before in any management, not even run by the army.

This became evident last week when a top Jamaat Islami delegation led by Mr Mehnti, tried to meet the top managers at the KESC office but they were not allowed on the 7th floor and security guards were called to shoo them out. A notice has been posted at the 7th floor that prior appointments are required to meet anyone.

Yet while the Abraaj management claims that these top level relationships with the political class have played no role in acquiring KESC or running it, the 28-page document submitted to The News denies these claims of not being a ‘most favoured company’, even before it has acquired the stakes.

For instance Abraaj has confirmed the following special favours given to the company in the last few months, eversince Abraaj started the due diligence process to acquire KESC. These statements of fact were made in answers to various questions in different contexts:

*   While Abraaj has already taken over KESC and started running the show, the document says: “Management control of KESC will transfer fully to Abraaj once the transaction has been completed. “The Consortium agreement has been signed between Abraaj and KES Power (Al Jomaih Group, the previous owners) and there are a number of conditions precedents that need to be satisfied before the subscription of shares can take place.” So factually Abraaj has no shares in KESC as of now but has been handed over the management.

*   “KES Power and the Government of Pakistan, as the existing shareholders of KESC, requested that Abraaj make its new management team available to the company prior to transaction completion”. Why the GOP was so interested in an Abraaj takeover even before the formalities and transfer of shares was completed has not been explained.

*   The new senior management team was appointed and empowered by the existing Board of Directors, including the Government, through circulation without any formal Board meeting.

*   “Abraaj’s entry into KESC will occur once the GOP approves a waiver to the Sales-Purchase agreement signed between the Privatisation Commission and KES Power in November 2005. The GoP has to approve the transaction and sale of new shares by KES Power to Abraaj by Nov 28, 2008 after which the shares would be available for transfer to Abraaj.”

*   Although Abraaj has yet to acquire the shares, Government of Pakistan has already approved a petition awarding Disco Status to KESC which means buying Wapda electricity at 25 to 30 per cent of the current rates. This concession was denied to all previous managements of KESC for years, not given even by General Pervez Musharraf to army generals running KESC. Yet Abraaj is so influential it says: “Following consultations with the GOP, and after filing a detailed petition with NEPRA, Abraaj and KESC were able to convince the Government and NEPRA that this discriminatory treatment must be reversed and KESC must be treated on par with all the other Discos (distribution companies) in the country. NEPRA issued a determination in this regard following full consultations and hearings....It is important to note that key beneficiaries of this decision are the consumer of Karachi.” This decision would save KESC Rs30 billion in money it owes to Pepco and in future it will get electricity cheaper from Wapda.

*   Regarding new concessions from the Zardari Government, Abraaj says:: “All that has been done is address actual problems and issues faced by KESC and to try and find solutions to these problems,” and significantly admits: “Some of these problems that were addressed had been lingering for years, without adequate focus from either the management of KESC or the Government....With active effort many of these problems have been solved, or at least begun to be solved..”

*   In a significant claim, the Abraaj statement says: “Without active involvement from Abraaj and the new management team, many of these issues would have remained unresolved.”

*   Government of Pakistan has already settled the dispute of pending payments between KESC and Wapda/Pepco on KESC’s terms. Besides the above fast track concessions, this is a major achievement as this was a lingering issue since 2004 but was resolved even before Abraaj has acquired the KESC shares. Abraaj, however, maintains that “Its (the Wapda dues) elimination does not alter KESC’s financial position and does not, in any sense, amount to a write off.”

*   Abraaj and Government of Pakistan have already agreed on amendments in the Implementation Agreement which was originally signed between KESC and the Government when KESC was privatised to Al-Jomiah Group in Nov 2005. The Abraaj statement claims these amendments will “bring the agreement up to date and to clarify the support which the Government will provide (to KESC under Abraaj).”

All these decisions and agreements have been possible not because the top managers are relatives of President Zardari but because they are so smart and competent, within days and weeks they have moved the mountains and forced the bureaucratic machine to move in their favour at top speed, so that when they take over the company fully, nothing is left to decide and they can concentrate on providing electricity to the people of Karachi now burning KESC bills and shouting slogans on Karachi streets.

This smart management is being paid a huge price for this job. According to KESC insiders the total bill of Mr Abbas and his 40 executives is the same US$ 8 million which was paid to Siemens for operation and maintenance contract by the Al-Jomaih Group. But Siemens was an operations company with engineers and equipment, while these 40 executives are managers with a few engineers but no equipment.

When Abraaj was asked about this huge monthly salary tabs, ranging from Rs 1 million at the lowest level to Rs 5 million for the chief executive, plus the perks, Abraaj’s written response was: “Compensation for the new management team has been approved by the Board of Directors of KESC and is paid by the company. The Government of Pakistan’s Directors have also approved the compensation to be paid to the CEO.”

But Abraaj refused to confirm or deny the figures saying: “Being a public company, the total salary costs for the CEO and the management team will be disclosed in the annual audited accounts but at this stage it is sufficient to say that they are competitive and commensurate with comparables available in the corporate sector of Pakistan.”

The statement, however said: “The numbers quoted by you are incorrect,” yet at another point in the statement, Abraaj says: “These individuals did not join KESC for salary inducements, rather they left lucrative professional careers elsewhere in order to be able to turnaround KESC and participate in a story that hopefully will have a beneficial impact on the lives of millions of people.”

This last statement is amusing as nowhere in the world any corporate executive leaves a lucrative job to “participate in a story” to impact millions of lives. That basically is politics.

Toshi

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Re: KESC -- Karachi Electric Supply Company
« Reply #3 on: December 09, 2009, 09:29:22 PM »
Electricity: KARACHI ELECTRIC SUPPLY COMPANY - Analysis of Financial Statements Financial Year 2003 - Financial Year 2009

OVERVIEW (December 09 2009): Karachi Electric Supply Company (KESC) was incorporated on September 13, 1913, under the Indian Companies Act, 1882. The company was nationalised in 1952, but again privatised on November 29, 2005. KESC came under the new management in September, 2008; a significant number of professional managers with experience in running utility and other large companies have joined under this management and will be running it until the company is turned into a best practice utility.

KESC is listed on all the three stock exchanges of Pakistan. Pakistan's electricity demand is expected to cross 20,000MWh by 2010. This will create a supply-demand deficit of around 5,500MWh in 2010. Almost 40% of the global electricity is produced through coal while 20% is produced from gas. In the context of the production of electricity on competitive rates; Pakistan has large reserves of gas and coal, and if proper infrastructure is developed, the country's per unit rate could be amongst the lowest in the world. Pakistan has also a great potential in terms of hydro-electricity, as the government has plans to build more dams in the coming years specifically for hydel power generation.

LIQUIDITY

The liquidity position of the company has been under pressure for a long time principally on the back of poor performance and managerial policy. The current ratio in FY08 stood at 0.53 and in FY09, we see a marginal improvement and the ratio stands at 0.79. The improvement seen is mainly on the back of a 69% increase in the current assets. However the breakup of increase in current assets reveals that the growth in current assets was mainly fueled by a 53% growth in Trade Debts, 25% growth in Amounts due from the government and a staggering 174% rise in other receivables.

Other receivables, mostly comprise of sales tax (Rs 5715.28 million), which include a sum of Rs 185.225 million relating to the refund claims for the period 2006-07 and Rs 425.234 million relating to the refund claims for the period 2000-2006, aggregating to Rs 610.459 million, withheld by the sales tax department on account of sales tax in connection with service charges, sales tax on meter burnt charges, input inadmissible under SRO and some other matters. The management is of the view, that the ultimate outcome of this matter will be decided in favour of the company.

However, to be prudent, the company has made an aggregate provision of Rs 232.050 million, tariff adjustments (Rs 14,319.9 million) and subsidies due from government on selected class of customers (Rs 285.8 million). It is also worth noting that as much as 96% of trade debts are unsecured and provisions against doubtful debts stand at Rs 14,271.67 million. The current liabilities registered a growth of around 13% for FY09. Power purchases registered a decline of 28.7%, 71% decline in fuel and gas purchases.

This is principally due to the management's policy of saving on fuel and power purchases costs. Interestingly, the electricity duty owed to the government stood at Rs 1157.9 million, a 76% from the previous year's expense. Electricity duty, tax deducted at source and PTV license fee are collected by the company from the consumers on behalf of the concerned authorities. Payments are made thereto upon receipt of these dues from the consumers. With the current expansion plans on the cards, coupled with hefty financial charges and other operational losses are keeping the pressure on the utility's liquidity.

PROFITABILITY

Profitability has remained negative over the six-year period under review. The main reasons for these losses are, firstly, the Transmission and Distribution (T&D) losses due to old and obsolete distribution network and theft of electricity. KESC's customer base includes 1.6 million residential consumers, 520,000 commercial and 37,000 industrial and agricultural consumers. The unit cost is subject to political decision-making as a huge chunk of domestic customers are affected by an increase in per unit price. In most of the preceding and the current year prices have been kept artificially low as fuel prices have sky rocketed during many previous years and for the most part last year as well.

For FY09, the revenues grew by 27% and stood at Rs 85,224 million. However, operating expenses rose by 17% during the same period and being substantial, resulted in a gross loss of Rs 6602 million. This is lower than FY08's loss of Rs 10,887 million. The rise in expenses can be attributed to the rise in purchase of electricity from NTDC and KANNUP whereas the fuel and gas consumption showed a modest rise. Furthermore the advertisements, sponsorships, employee benefit schemes, free electricity to employees and other such expenses have also left an impact on the company's profitability performance.

DEBT MANAGEMENT

Total debt to total asset has jumped to 99.86% in FY09 as compared to 92.57% in FY08. This is attributed to the multiple-fold rise in current maturity of long-term financing loans, which stand at Rs 15870 million in FY09. The mark-up bill also shows a growth of 53% in the same period. The trade payables during FY09 stood at Rs 30,289 million, which is almost 21% less than the previous year's ie FY08. The non-current liabilities grew by 114% in FY09 to stand at Rs 70,344 million. Long-term financing is the major factor in the rise of non-current liabilities, standing with a 411% growth to Rs 45,030 million.

This is mainly because of the management's plan to invest in new generation facilities and improving and upgrading of the existing facilities. The execution and completion of these projects are expected to alleviate the supply problems of the under equipped power utility. Debt to equity ratio increased at an alarmingly high level of 73113.46% in FY09 from an already phenomenal figure of 1245.13% in FY08 due to the decrease in equity due to higher accumulated losses and subsequent provisioning to accommodate the losses arising principally form theft and transmission losses.

Days sales outstanding (DSO) has increased from 89.74 days in FY08 to 118 days in FY09, mainly because of the rise in trade debts. This was also the main reason for the increase in the operating cycle from 123.93 days in FY08 to 147 days in FY09. The sales to equity ratio stood at 326, mainly due to a sharp decline in the equity side of balance sheet as a result of accumulated losses.

FUTURE OUTLOOK

The privatization of the company took place in November 2005, with the transfer of 73% shares along with the management control to KES Power and others. The new management has employed Siemens Pakistan Engineering Limited as the operations and management contractor for the operation and management of the company. The company is going through a transitional period although net losses have continued to increase over the past few years; it is expected that the rehabilitation of transmission and distribution network which has been under execution in a phased manner, will decrease these losses and eventually the company will start making profits.

The construction of new power plants to bridge the supply-demand gap is an integral component of the strategy of the new KESC management to turn the company into an efficient and profitable entity at the earliest. In 2007, two new projects were planned, a 220 MW combined cycle gas power plant at Korangi (Phase 1), and a 560 MW gas-fired combined cycle plant at Bin Qasim (Phase 2). Generation from the 220 MW power plant has since begun, and the plant is fully commissioned. Following some initial delays due to contract negotiations with the selected contractor, the 560 MW, Phase-II project is now also underway.

The EPC contract has been amended and signed, advance payments amounting to US $56 million have been paid, and the company is in the process of establishing the first Letter of Credit under the contract. Part of the new equity injection by the new shareholders amounting to US $361 million will be utilized to fund the capital costs of this project, along with medium and long-term finance facilities upto Rs 25 billion from local and international financial institutions. Pursuant to the loan agreements and subscription agreements between KESC, IFC and ADB, IFC and ADB shall have the option to subscribe and pay for KESC ordinary shares at a minimum price of Rs 3.50 upto a maximum of USD 25 million each to be converted to equivalent Rs at applicable exchange rate on the date of subscription with a cap of USD 1=Rs 90.

IFC and ADB will essentially convert a portion of their loans to the company into equity, reducing the debt burden on the Company and enhancing capital. The turnaround strategy devised and actively pursued by KESC management with the complete support of major shareholders viz. KES Power and GOP and capex financing from new equity injection of US $361 million over three years and through local and international financial institutions is likely to produce improved operational & financial results which would benefit all the stakeholders, especially the minority shareholders during the forthcoming years.

The Company has also sped up the work on the construction of 560MWs open cycle thermal plant at Bin Qasim Power Station, called BQPS-II, in partnership with a Chinese firm, Harbin. The advance payment of $56 million was made and a Letter of Credit worth $75 million had been opened recently. The company therefore has the potential to turn profitable and achieve operational excellence. Also, conservatively speaking, some improvements have already been noticed such as Announced and scheduled load shedding, reduction in tripping, more consistency and accuracy in billing and improvements of customer support. All these measure are indicating that KESC is inching towards its position that it strives to be at in its vision statement.

COURTESY: Economics and Finance Department, Institute of Business Administration

Toshi

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Re: KESC -- Karachi Electric Supply Company
« Reply #4 on: December 11, 2009, 10:36:45 PM »
KESC allowed to issue 14.5pc right shares

KARACHI: The Security and Exchange Commission of Pakistan (SECP) has relaxed the condition for issuing right shares twice in a year and allowed Karachi Electric Supply Corporation (KESC) to issue 2.501 billion ordinary or 14.50 per cent right shares at Rs3.5 per share.

According to a communique to KSE here Wednesday, Karachi Electric Supply Company (KESC) said that SECP has allowed its request with the condition that the company should provide an undertaking from the Government of Pakistan to subscribe its portion of the right issue.

KESC said that its share transfer books will be closed from January 2 to 8, 2010 to determine shareholders entitlement to the right shares.

The company is expected to generate Rs8.751 billion from the issue to fund the expansion of transmission and distribution network and system improvement and loss reduction projects.

This will improve operational and financial viability and profitability of the company.

It will also reduce financing cost and positively contribute to future financial results of KESC.

According to KESC’s projections, the first right issue will enhance paid up capital to Rs66.354 billion while the second will swell the capital to Rs75 billion.

The right issue is expected to reduce the net loss of the utility company to Rs2.267 billion by 2010-11 and turnaround the company by 2011-12 showing a net profit of Rs8.278 billion and enhance this profit to Rs23.615 billion by 2012-13.
« Last Edit: December 11, 2009, 10:40:24 PM by Toshi »

Toshi

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Re: KESC -- Karachi Electric Supply Company
« Reply #5 on: December 15, 2009, 11:06:15 PM »
KESC, Oracle to set up Thar’s first coal power plan

KARACHI: The Karachi Electric Supply Company (KESC) has signed a Memorandum of Understanding (MoU) with Oracle Coalfields, a company incorporated in England and Wales and primarily engaged in coal drilling, exploration, mining and production, to set up a major coal-fired power plant at Thar Coalfields in Sindh.

An announcement to this effect was made in a statement issued by the KESC.

According to the MoU, Oracle Coalfields will own and operate the mine supplying coal to the power plant.

This MoU is part of KESC’s initiative to develop and implement several power projects based on local alternate energy sources on fast-track basis to overcome the existing and projected energy shortage in Karachi.

The integrated coal mine and power generation structure will ensure a long-term fuel supply from Oracle Coalfields for the operation of the coal-fired power plant.

Moreover, this will create interest and momentum for other investors to explore the huge coal reserves in Thar which in turn will contribute greatly towards the economic revival of Pakistan.

Toshi

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Re: KESC -- Karachi Electric Supply Company
« Reply #6 on: December 17, 2009, 06:24:37 PM »
KESC to issue 1.300bn shares to IFC, ADB

KARACHI: The Karachi Electric Supply Company has convened an extra-ordinary general meeting on January 20 to consider and approve issuance of additional share capital to the extent of $50 million International Finance Corporation and Asian Development Bank. According to a communique sent to the Karachi Stock Exchange on Wednesday, the utility company said that the shareholders of KESC had resolved to issue 1.300 billion ordinary shares at Rs 3.5 per share to IFC and ADB (650 million shares each) subject to the regulatory approval. The subscription of these shares by IFC and ADB will not be late than December 31, 2012. app

Toshi

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Re: KESC -- Karachi Electric Supply Company
« Reply #7 on: January 01, 2010, 06:28:41 PM »
Rs 85bn for KESC system upgradation

KARACHI: The Karachi Electric Supply Company (KESC) has planned to invest an amount of Rs 85 billion in its future integrated plan for upgradation and in its quest to supply uninterrupted power to its consumers, this was stated by KESC Managing Director Tabish Gouhar.

Addressing the members of the Korangi Association of Trade and Industry (KATI) on Thursday, the KESC chief said that out of Rs 85 billion, 40 percent would be equity while 60 percent would be bank financing. He said that Abraj Capital has already arranged Rs 16 billion while the government would provide Rs 4 billion as its share in January.

While declaring that industrial areas are exempted from load shedding, Gouhar said that KESC was facing monetary crunch, as many departments have not paid KESC’s dues. He said that only three hours load shedding is being carried out in the city and that too due to the shortage of cash flow.

He said that Karachi Water and Sewerage Board (KWSB) and the city government owe Rs 11 billion to Rs 12 billion but KESC was avoiding disconnection of KWSB as it will create water crisis in the city.

Gouhar said that if KESC was given natural gas on subsidised rates as extended to the fertilizer sector, it would pass the benefit on to the consumers. He advised the industrial as well as commercial and domestic consumers to adopt power saving methods in order to conserve energy so that load shedding could be avoided. He advised the industrial consumers to adopt power saving mode as prescribed by KESC to save 10 to 15 percent electricity. Gouhar announced to carryout a campaign against kunda system particularly in the areas of Mehran Town adjacent to Korangi Industrial Area from January 1, 2010.

He advised the KATI members to share the information of their future expansion plan such as setting up new units with the KESC so that KESC would be able to plan the industrial areas’ demand side by side. KATI Patron In-chief S M Muneer said that the KESC under its new chief has tried to strictly observe load shedding timings due to which consumers could plan their daily routine. staff report

Toshi

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Re: KESC -- Karachi Electric Supply Company
« Reply #8 on: January 05, 2010, 11:17:45 AM »
Schedule of issue of KESC right shares approved
RECORDER REPORT
KARACHI (January 05 2010): The Karachi Stock Exchange (KSE) has approved the schedule of issue of right shares of Karachi Electric Supply Company Limited. According to a notice issued here on Monday, the trading in the Unpaid Rights of the company will start on the exchange with effect from January 18, 2010. The first settlement date will be January 20, 2010.

The Unpaid Rights of the company have already been declared as eligible security by the Central Depository Company of Pakistan Limited (CDC) and all the transactions will be settled through the National Clearing Company of Pakistan Limited (NCCPL), which has already assigned the Company Code/Security Symbol as "KESCR".

Offline azam56

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Re: KESC -- Karachi Electric Supply Company
« Reply #9 on: January 22, 2010, 07:52:55 AM »
ADB and IFC to acquire 1.3 billion ordinary shares of KESC


KARACHI (January 22 2010): The Asian Development Bank (ADB) and International Finance Corporation (IFC) are going to acquire 1.3 billion ordinary shares of Karachi Electric Supply Company (KESC), worth 50 million dollars. The company has offered 1.3 billion ordinary shares to ADB and IFC, at a price of not less than Rs 3.50 per share, which will be pari passu in every respect with the existing capital of the company.

KESC in its Extraordinary General Meeting (EGM) on Wednesday, held here at Navy Welfare Centre, Liaquat Barracks, resolved that Directors of the Company be and are, hereby, authorised to take all necessary steps to approve the terms of issuance of up to 650 million shares worth $25 million, to each IFC and ADB.

The measure, according to sources, is aimed at adjusting the Rs 27.5 billion, which the utility owes to the two international financial institutions. The measure would, however, be taken after the completion of all legal requirements envisaged under Companies Ordinance, 1984 and KESC Memorandum & Articles of Association, the meeting said.

It was resolved that the issue of further capital to the extent of $50 million to be converted to equivalent Pak Rupees (PKR) at applicable exchange rate on the date of subscription viz, additional share capital in PKR up to an estimated Rs 4500 million, to IFC and ADB without making a Right Issue be and is, hereby, approved subject to the approval of the Federal Government/Securities & Exchange Commission of Pakistan (SECP) as required U/S 86(1) of the Companies Ordinance, 1984. It was also resolved the date of subscription of these shares by IFC and ADB shall not be later than December 31, 2012.

It further resolved that four directors of the company, including Zulfiqar Haider Ali, Syed Arshad Masood Zahidi, Syed Nayyer Hussain and Muhammad Tayyab Tareen are hereby accorded the sanction of the company in general meeting to hold the offices of profit like Head of Special Projects, Chief Strategic Officer - Generation & Transmission, Chief Strategic Officer - Distribution and Group Head HR Management / Group CFO respectively, in the Company.

However, sources said, the minority shareholders objected to the offer of extra duties to the four directors with the payment of Rs 0.5 million each, saying being the elected directors, they should not hold additional charges in the company.

But, justifying their recruitment, Tabish Goahar, chief executive officer (CEO) of KESC, who, in absence of company's chairman Waqar Hussain, was chairing the meeting, said the directors were highly qualified and company needed their services, they added. They said the EGM was also informed by the CEO that KESC would, free of cost, distribute almost six thousand energy savers to the arson's effectees of Boultan Market. He also announced the same offer to all shareholders if they added.

Offline saba malik

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Re: KESC -- Karachi Electric Supply Company
« Reply #10 on: February 12, 2010, 02:09:40 PM »
Volumes are good any game expectations?

Offline Karuli

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Re: KESC -- Karachi Electric Supply Company
« Reply #11 on: March 19, 2010, 11:29:05 AM »
The Pakistan State Oil pumped in 1,100 tons of furnace oil to the Karachi Electric Supply Company on Monday in order to avert a massive breakdown in the city.

Although the crisis of circular debt remains unresolved, the arrangement has been made ostensibly following pressure by the federal government, which intervened in the wake of warnings that Karachi might face prolonged power outages if KESC did not get furnace oil in time.

At a press conference here on Tuesday, PSO’s managing-director Irfan Qureshi said: “We have not disconnected supplies to KESC despite the power utility’s failure to clear its dues. But this cannot continue indefinitely and we will be constrained to disconnect supplies if the dues are not cleared.”

He said the PSO had maintained supplies after intervention by the petroleum minister and the Sindh governor and that it was sufficient for KESC, which was also getting gas from SSGC. Mr Qureshi said that KESC had lifted furnace oil worth Rs847 million to date against a credit of Rs800 million given by PSO to KESC for 30 days.

He said that the PSO supplied 1,100 tons to KESC on Monday night, causing exhaustion of their credit line.

The power utility has already defaulted on Rs336 million beyond the 30 days credit line.

He said that PSO supplied 89,000 tons of furnace oil to KESC at the price of gas during the winter season as per instructions from the ministry of petroleum and natural resources under the Gas Load Management Plan (GLMP).

The price differential between furnace oil and gas price, amounting to Rs2.4 billion, would be given by the federal government to PSO. The subsidised fuel arrangement is costing PSO Rs1 million a day.

The KESC has also defaulted on installments totaling Rs32.6 million due on Feb 28 against an interest-free long-term loan of Rs1.045 billion.

Mr Qureshi said the current outstanding balance of the long-term loan was Rs261 million and PSO incurred a substantial loss on this account.

“Keeping in consideration, the Rs104 billion circular debt receivable from PSO, it is imperative that dues against KESC worth Rs3.5 billion are settled on the top priority basis to ensure PSO to continue supplies,” he said.

The PSO MD said his company would also like to review the existing fuel supply agreement with KESC.

Asked to give his take on the claims made by PSO on the circular debt issue, a spokesperson for KESC offered “no comments”.

In a written statement, he said: “KESC has always and will continue to ensure that payments to PSO are made on a timely basis, but PSO must accept KESC’s demand for reasonable commercial credit terms.”

He did not elaborate on “reasonable commercial credit”.

KESC maintains that “PSO’s demand that it must be paid in full in advance “is not commercial, and disavows any public service responsibility”.

According to KESC, it had paid in advance and in full for all supplies of furnace oil and had placed orders for additional supplies well in time.

The power utility claimed that PSO had shown reluctance to maintain supplies at agreed gas equivalent price even though gas curtailment had not ended.

Despite being promised 140 MMCFD of gas, KESC has on average received less than 110 MMCFD during the period that GLMP has been in force. Even though GLMP expired on March 15, gas supply to KESC has not been restored to the allocated volume of 276 MMCFD and continues to be below 140 MMCFD, the spokesman added.

Offline Karuli

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Re: KESC -- Karachi Electric Supply Company
« Reply #12 on: March 20, 2010, 11:19:13 AM »
The National Electric Power Regulatory Authority (Nepra) said on Friday that Pepco’s Central Power Purchase Agency had sought an increase of about Rs1.44 per unit (Kwh) on the basis of fuel expenditure of power companies for February.

The increase has been sought under the monthly fuel adjustment formula.

However, a final determination of the fuel-based tariff increase will be subject to a public hearing on March 24.

Sources in Nepra said the generation cost of Kot Addu Thermal Power Company had significantly increased because of its higher reliance on diesel instead of natural gas or furnace oil.

Besides fuel-based tariff hike, the government has already made a commitment to the International Monetary Fund and the World Bank to raise overall electricity rates by another six per cent from April 1.

The IMF programme requires the government to revise base electricity tariff on a quarterly basis to recover actual cost of service over and above the monthly fuel-based tariff adjustment to cover the fuel cost.

Under both accounts — base tariff and fuel cost — the government has already increased the tariff by more than 60 per cent since September last year. Early this month alone, Nepra raised tariff by an average Rs1.02 per unit under the monthly fuel adjustment mechanism.

KESC Slammed

A meeting of the cabinet committee on energy crisis, presided over by Water and Power Minister Raja Pervez Ashraf, criticised the Karachi Electric Supply Corporation for not utilising full capacity for power generation, which led to the current power crisis in Karachi.

The meeting was informed that KESC was not drawing furnace oil from PSO because of non-payment of its dues. The meeting directed the KESC management to lift at least 2,000 tons of furnace oil per day to increase its generation by 250MW.

The meeting decided to increase KESC’s credit limit to Rs1 billion to enable it to buy fuel from PSO. No mark-up will be charged if the power utility clears the dues within 15 days. The committee was informed that KESC had not paid over Rs55 billion dues to the Pakistan Electric Power Company.

Finance Secretary Salman Siddique informed the meeting that about Rs25 billion would be paid to Pepco to enable it to make payments for fuel purchased from PSO and electricity from independent power producers.

The meeting was attended by Information Minister Qamar Zaman Kaira, secretaries of finance, water and power and petroleum as well as heads of Pepco, PSO, KESC and SNGPL.

Participants were told that the gap between power demand and supply had reached 3,600-4,000MW, necessitating an average eight-hour loadshedding across the country.

It was informed that the current spate of loadshedding would come down by the end of the current month after additional fuel supplies and improved water availability.

“Rising temperatures in northern parts are expected to speed up snow melting and result in improvement of river flows over the next 10-15 days. The hydropower generation will go up from 1,500MW to about 2,500-3,000MW. Another 1,000-1500MW will come through maximum fuel supplies and completion of two independent power projects,” the meeting was informed.

The committee asked gas companies, PSO and Pepco to treat KESC like generation companies of Pepco without any special favour. The KESC will not be given discount on oil or gas which it was earlier enjoying to cover the price difference between gas and fuel oil.

The meeting was informed that the natural gas load management plan was still in place because consumers had not switched off their geysers. However, about 100-150mmcfd of gas could be diverted to the power sector by the end of this month.

The committee asked the petroleum ministry to prepare a plan containing proposals for diversion of gas from other sectors to the power sector. The plan will be submitted to the prime minister.

Offline Karuli

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Re: KESC -- Karachi Electric Supply Company
« Reply #13 on: March 24, 2010, 07:14:49 PM »

Offline sumbul

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Re: KESC -- Karachi Electric Supply Company
« Reply #14 on: April 21, 2010, 11:15:59 AM »
Very Very Very STRONG BUY KESC. Phir na khan key bataya nahin  :biggthumpup:  :goodc:

Offline suneelahmed

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Re: KESC -- Karachi Electric Supply Company
« Reply #15 on: April 21, 2010, 11:42:39 AM »
why are you giving strong buy signal, what is the news??? please share. :thanks:

Offline Karuli

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Re: KESC -- Karachi Electric Supply Company
« Reply #16 on: April 21, 2010, 11:50:58 AM »
Very Very Very STRONG BUY KESC. Phir na khan key bataya nahin  :biggthumpup:  :goodc:
any reason please share

Offline sumbul

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Re: KESC -- Karachi Electric Supply Company
« Reply #17 on: April 21, 2010, 11:55:02 AM »
Very Very Very STRONG BUY KESC. Phir na khan key bataya nahin  :biggthumpup:  :goodc:
any reason please share

I have its credit proposal on my table at this moment. In addition to its existing 220 MW plant at Korangi which has recently become operational, another 560 Mw plant at Bin Qasim is in progress. Cost of project USD 145M. USD 100M LC already opened from NBP. Apart from local & foreign banks, ADB & IFC are also financing these projects.  :biggthumpup:

Offline suneelahmed

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Re: KESC -- Karachi Electric Supply Company
« Reply #18 on: April 21, 2010, 12:01:01 PM »
what is your target price and time frame in mind?????  :thanks: