KE to offer Rs3bn Sukuk through public subscription

K-Electric Limited, the country’s only vertically integrated power utility, plans to offer the Sukuk through a public offering.

“PSX is pleased to inform all concerned that KE, a listed company on the Exchange, has applied for listing of its rated, unsecured, short-term Sukuk Certificates on the Exchange,” said PSX, while sharing the KE’s prospectus.

The total issue size is Rs 3,000 million, out of which Rs 1,000 million have been issued to Pre-IPO investors and Rs 2,000 million are being issued to the general public, inclusive of the green-shoe option of Rs 1,000 million, through a public offer.

The Sukuk Certificates will be offered in denominations of Rs 10,000/- or multiples of Rs 10,000/-, with a minimum investment requirement of Rs 50,000/-, i.e. for 5 Sukuk Certificates.

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K-Electric is principally engaged in the generation, transmission and distribution of electric energy under the Electricity Act, 1910 and the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997) read with the NEPRA.

KE shared that the primary purpose of utilisation of the Sukuk Issue proceeds is to fund routine working capital requirements of the company that primarily arise due to timing differences between outflows and the requisite inflows.

“Working capital requirements include fuel payments and power purchases, which will be partially funded by the proceeds from this financial instrument,” read the prospectus.

The company shared that it has prepared a network investment plan of $2 billion for the period FY24 to FY30, focused on expanding grid infrastructure, reducing technical losses, and boosting renewable energy’s share to 30%.

It is currently developing over 600 MW in solar and hybrid projects, with support from the Government of Sindh and private partners.

Additionally, the company has secured new power purchase and subsidy agreements with the Government of Pakistan, aimed at streamlining power offtake and improving cash flows.

In response to a question, Spokesperson KE said, “Regulatory approvals from relevant forums are being sought at the moment.”