Xenel Industries Limited, a company based in Jeddah, Saudi Arabia, has decided to sell its stake in the Hub Power Company Limited (HUBCO), one of the major power producing companies in Pakistan.
“We have 12 percent shares (about 140 million shares) in Hubco that are being disposed of,” Xenel Industries Chief Financial Officer (CFO) Ashraf Tumbi told Pakistan Today on Sunday. It was now time to take the decision to sell Xenel’s shares in HUBCO, he said, adding that a number of Pakistani companies were negotiating a deal with Xenel to acquire its shares. “At this point in time it would be premature to say which company is buying the shares,” he said.
In response to repeated enquiries about the reason that forced the company to sell its stake in HUBCO, Tumbi just said: “The time has come to take this decision.” HUBCO is being traded at stock markets in Pakistan. On Friday its shares closed at Rs 40 and analysts believe that the sale deal could be in the range of this benchmark. Around $60 million worth of foreign investment would register an outflow in the next few days as the process takes place, sources in the capital market said.
Xenel Industries is the second largest shareholder of HUBCO. The leading shareholder is National Power International Holding BV, which owns around 201 million shares. Sources also said state-owned listed companies such as National Bank, State Life Insurance, National Investment Trust and some private groups were negotiating a deal with the Saudi company. Some of these companies had also purchased shares from the stock market, which was evident from the increase in the average daily volume of trading of HUBCO shares, 10.72 million in the last week, as opposed to the average daily trading of a million shares of the company in the last year, sources said.
They added that the chronic circular debt and the government’s lack of interest in buying electricity from power generation companies because of shortage of funds had irritated the foreign investors. They said however that it was a good sign that Pakistani companies were vying to acquire Xenel’s stake in HUBCO.