KES Power Limited, a multinational consortium and the holding company of K-Electric Limited (KEL), has divested three percent of its stakes worth Rs 6.58 billion or $64.74 million in the Karachi-based power utility. The divestment, the KEL insiders said, was aimed at increasing the scrip's free-float on the booming stocks market to 5.6 percent from existing 2.8 percent.
Price discovery through increased trading in the stock, they said, was another objective of KEL's Middle Eastern owners. "It would approximately double the free float of KE shares in the market," KEL told its shareholders at the country's three stock exchanges in Karachi, Lahore and Islamabad. The KES Power sold out over 774.639 million ordinary shares of K-Electric to sundry investors through Karachi Stock Exchange (KSE) at Rs 8.50 per share during February 2-4. The divestment appears to have fetched over Rs 6.58 billion for the offshore investors. The three sessions saw significant trading activity in the shares of KEL that stood third, second and fourth best performing scrip, respectively, on February 2, 3 and 4.
During these days the opening and closing price of the company's share ranged between Rs 8.41 and Rs 8.80. The KES Power whereas notified the divestment of more than 774.639 million shares to various investors, the trading turnover for the three trading days at KSE's ready-counter was recorded accumulating to 73.068 million shares: 20.2 million on 2nd, 30.07 million on 3rd and 21.72 million on the 4th of this month.
This, an equity analyst explained, might be because the KES Power might have divested some of the shares through off-market trading. "The company would have sold its stakes to the brokers with trading rights who would have floated the same on the market," the analyst added.
KES Power is a consortium of Abraaj Group of United Arab Emirates, Al-Jomaih of Saudi Arabia and National Industries Group (NIG) of Kuwait which holds majority 69.2 percent shares in KEL, the Karachi based private-run power utility. The fresh divestment brought the consortium's stake holding in the utility down to 66.4 percent. According to a KEL insider, the 2.8 percent divestment was 'very low' to achieve a bigger objective of ensuring active trading in the stock. The desired increased trading, he said, would ensure some price discovery on the bourse.