Karachi, November 29, 2012 (PPI-OT): Karachi Electric Supply Company has declared through a statement that two of its debt financiers, International Finance Corporation (IFC) and Asian Development Bank (ADB) who are lenders of US$275 million to KESC have expressed their intent to partially convert their debt into equity. Each of the two institutions will invest up to USD 25 million equivalent in the common shares of the power utility, thus translating into an equity infusion of USD 50 million equivalent .
As per the loan financing agreement signed by IFC (a member of the World Bank Group) and ADB with KESC in 2010, the two international institutions have the right to convert upto US$50 million of their debt into equity before 31 Dec 2012. Accordingly, IFC and ADB have communicated their intent to exercise this right for the full amount.
As per KESC management, this positive development, where two leading international financial institutions are geared to become shareholders in KESC is a reflection of their confidence in the turnaround progress being made by the power utility.
The direct and immediate impact of the conversion of this loan facility into equity will mean significant reduction in KESC’s debt, not only translating into greater financial leverage but will also mean substantial savings in terms of servicing financial charges. This positive endorsement by IFC and ADB is being viewed by KESC as paving way for international investor confidence not only in the utility but also in the Pakistan economy.
For more information, contact:
Assistant Manager, Media and PR
Karachi Electric Supply Company Limited (KESC)
2nd Floor, State Life Building No 11,
Abdullah Haroon Road, Saddar,
Tel: +9221 9920 7163
Cell: +92346 822 3641