KESC

Karachi Electric Supply Company

Karachi Electric Supply Company Limited (KESC), (formerly Karachi Electric Supply Corporation) was incorporated in 1913 via the Indian Companies Act of 1882. In 1952, the Government of Pakistan (GoP) acquired a majority shareholding of KESC. KESC is the only remaining vertically integrated power utility in Pakistan and has exclusive franchise rights to serve Karachi, Pakistan’s largest city, and its surrounding areas. The Company has about 18,000 employees; its network spans an area of 6,000 square kilometers and serves roughly 2 million customers. Listed on all three of Pakistan’s stock exchanges, KESC has a market capitalization of nearly US$ 725 million and generated revenues of nearly US$ 1 billion in fiscal year 2008.

In the 1970s and 1980s, Pakistan suffered from intense power shortages, which led subsequent governments to the realization that a serious power crisis was in the offing. With a view towards encouraging private investment in the country’s power sector, the GoP began providing lucrative incentives to foreign investors through various power policies, the first of which was initiated in 1994. Through the 1994 Power Policy, the establishment of Independent Power Producers (IPPs) was encouraged to provide Pakistan with much-needed investment in the power industry.

In 1996, a steep deterioration in KESC’s financial health began, which promoted suggestions for the utility’s transfer into private hands. During the interim between 1996 and 2005, Army management was instated at the state utility with a view towards enhancing the Company’s operational and financial health in May 1999. There are conflicting views towards this shift and management, with allegations of severe misconduct.

During 2002 and 2003, incentives were introduced in preparation for KESC’s privatization, which eventually finalized on November 29, 2005 with a 71% transfer of ownership to a consortium comprising of the Saudi Al-Jomaih Group of Companies and Kuwait’s National Industries Group (NIG), with the government still retaining a 26% stake. Due to various operational setbacks and the ill-fated choice of Siemens as an Operations and Management (O&M) contractor, the privatized consortium was unable to improve the Company’s financial and operational crisis.

In the earlier part of 2008, Saudi Al-Jomaih, approached Abraaj Capital, a leading private equity firm based in Dubai, with a proposal for a potential stake in KESC. The deal was eventually finalized in October 2008 at a ticket price of $ 361 million for a significant equity stake in the Company, which grants Abraaj Capital full management control. Abraaj Capital has brought in a professional management team with over 41 senior managers to immediately address the management crisis at KESC. The team is being spearheaded by Naveed Ismail, KESC’s Chief Executive Officer (CEO).

Refrence

http://en.wikipedia.org

Karachi Electric Supply Company Limited

Type	Public
Founded	September, 1913
Headquarters	Karachi, Pakistan
Key people	Abdulaziz Hamad Aljomaih, Chairman; Naveed Ismail, Managing Director
Industry	Electricity Generation and Distribution (installed capacity 1,739 MW)
Revenue	▲PKR 49.606 billion (2007-08)
Total assets	PKR 93.076 Billion
Website	www.kesc.com.pk