The country is going to receive a fresh setback on account of foreign investment, as a major shareholding Dutch company in Hub Power Company (Hubco) has decided to offload its entire stakes in local stocks market.
After Saudi Arabia’s Ms Xenel International, which in October last year sold 140 million of its shares in the Independent Power Producer (IPP) to local buyers from government banks, insurance companies and fund managers, the National Power International Holdings BV is also selling its majority ordinary shares in Hubco.
According to company sources, the Power International, the single largest shareholder in Hubco, has entered into share sale and purchase
agreements with the Dawood Group and Allied Bank Limited.
The deal is to sell the Netherlands’s firm’s entire 17.44 percent shares in Hubco that account for some 201.803 million shares. The rate for the sale is said to be Rs 31 per share. Hubco’s current Daily Weighted Average Rate is Rs 33.03 on the Karachi bourse.
Of the total saleable shares, Dawood Group is purchasing 137.74 million shares, of which 35.48 million would be bought by the Dawood Hercules Corporation and 102.26 million shares by its wholly-owned subsidiary, DH Fertilizer Limited.
While the Allied Bank is purchasing one percent of the total saleable shares numbering over 11.803 million shares. This means the volume of the proposed acquisition is of a worth beyond Rs 4.635 billion or over $ 51 million.
It was in October 2011 when Xenel International had divested at least 12 percent of its shareholdings in the power producing firm in the local market at a discount rate of Rs 37 against the Hubco’s then market price of Rs 40.20. The pre-dividend volume of that deal was approximated at $ 65 million. If the deal is executed as the same is awaiting approval of the government and other concerned authorities, this would be a major outflow of the foreign investment from Pakistan which is already seeing its current account deficit widening beyond $ 2.9 billion during first eight months of the current fiscal year, FY2011-2012.
