Transfer of NPKAL shares: PC tells UK firm Wapda''s approval mandatory

The Privatisation Commission (PC) has conveyed to the International Power of UK that the shares of National Power Kot Addu Limited (NPKAL) could only be allowed to transfer to a party whose credentials are acceptable to Water and Power Development Authority (Wapda), sources in the PC told Business Recorder.
The International Power had demanded de-materialisation and transfer of shares of NPKAL without any restriction but the PC is creating hurdles at its best. The sources said, International Power''s request for unconditional de-materialisation of 228,865,835 Kapco shares held by NPKAL was considered at a meeting with Wapda, the water & power and the finance ministries.
It was agreed at the meeting that the de-materialisation of shares would be made subject to the condition that they would be sold in one block to a party with technical and financial capabilities comparable to International Power and that party''s credentials were acceptable to Wapda.
In addition, Wapda has proposed that NPKAL considers it a binding agreement that it shall not sell or otherwise transfer its interest in the said shares to any party unless such party agrees to be bound by all terms and conditions of the shareholders agreement, mutatis mutandis, and unless each party further agrees and binds itself to sell or otherwise transfer its interest in such shares to any other party except in accordance with the terms and conditions of the shareholders agreement as well as terms and conditions of this consent, including the present condition, the sources added.
The International Power is of the view that "current condition attached to our shares is that we must seek GoP''s approval, not to be unreasonably withheld and only in relation to national security".
It also said that it was difficult to contemplate how Kapco could influence Pakistan''s national security at this time," the sources quoted from a written statement by the company that it has reportedly addressed to Privatisation and Investment Minister Zahid Hamid.
Sources said the International Power had requested consent as required by the shareholders'' agreement of January 11, 2005 to the unconditional de-materialisation and transfer of its Kapco shares without restriction, as is appropriate for a shareholder in a company whose shares are listed and therefore (under normal circumstances) freely transferable.