KE informs PSX of Sage acquiring large part of controlling stake

• KE's disclosure comes after PSX asks utility company to explain sale of its controlling stake.
• Sage Venture Group Limited has acquired certain limited partnership interests in KE.
• Mark Skelton played key role in sale of KE.

LONDON: K-Electric (KE) has confirmed to the Pakistan Stock Exchange (PSX) that a large part of the controlling stake in IGCF has been acquired by Sage Venture Group Limited, a British Virgin Islands-registered special purpose company.

The disclosure by KE comes after PSX asked the utility company to explain a report that stated that the power provider’s large part of the controlling stake was being sold at the Cayman Islands Courts.

Reacting to The News story, the PSX had asked the KE to “immediately disseminate” to the bourse and Securities & Exchange Commission of Pakistan (SECP) to release “any information that may affect the market price of its shares in the manner prescribed by the exchange from time to time”.

Although KE reacted to the above notice on Tuesday by saying that they had “not been informed of any specifics regarding the potential transaction”, it appears that the situation changed and a statement has been released to the PSX that largely confirms the facts reported earlier.

“Further to the disclosure made by K-Electric Limited (K-Electric) on October 18, 2022, K-Electric has now been informed that changes have been consummated involving IGCF General Partner Limited (IGCF GP), being the fund manager, and the Infrastructure and Growth Capital Fund L.P. (Fund), being the owner of the Fund assets. In particular, controlling interests in IGCF GP and certain limited partnership interests in the Fund have been acquired by Sage Venture Group Limited, a British Virgin Islands registered special purpose company wholly owned by AsiaPak Investments Limited. The Fund’s indirect non-controlling shareholding in K-Electric however remains unchanged,” the utility provider said in the document, which is available to Geo News.

The document adds: “The Fund is a Cayman Islands registered private investment fund with numerous institutional investors that is managed by the IGCF GP and holds multiple assets, including an indirect non-controlling shareholding in K-Electric. Further, for the sake of clarity, the Fund does not have a controlling interest in K-Electric nor a controlling position on the K-Electric Board of Directors.

“K-Electric has also been informed that KES Power Limited, direct majority shareholder of K-Electric, has decided to make certain changes to its nominee directors on the K-Electric Board.”

Geo News has also learnt that Justice Segal in the Cayman Courts sanctioned Deloitte’s actions to sell certain assets of Abraaj Investment Management (in liquidation) that pertain to KE on October 13 just after this story was highlighted in The News and Daily Jang.

However, the document released to the PSX adds: “The Fund does not have a controlling interest in K-Electric nor a controlling position on the K-Electric Board of Directors.

“K-Electric has also been informed that KES Power Limited, direct majority shareholder of K-Electric, has decided to make certain changes to its nominee directors on the K-Electric Board.” 

If the now-defunct Abraaj had a controlling interest in KES Power and appointed the majority of directors in KE, then whoever steps into their effective shoes will also have control over KE.

The News had previously revealed that the sale of a large part of the controlling stake in KE held by KES Power outside Pakistan had appeared to be at advanced stages, awaiting approval from a Cayman Islands court but the Government of Pakistan was not aware of the deal due to secrecy and the stake was being acquired by a recently incorporated entity called Sage Ventures Limited formed in an offshore tax haven. 

Further information available with this reporter shows that Mark Skelton played a key role in the whole process.

Skelton did not respond to questions but sources in KE informed that he was apparently the representative of Alvarez and Marsal (A&M) as the administrator of Infrastructure and Growth Capital Fund (IGCF). He is also the Chairman of both KES Power in Cayman Islands which owns the controlling stake in KE and recently also became chairman of the KE itself, a listed national strategic asset of Pakistan.

Very credible investor sources have shown documents to Geo News that show that Skelton first wrote to IGCF investors on July 4, 2022, who invested their capital into IGCF 15 years ago and have been patiently waiting for a return of their capital. The letter was sent only to certain investors selectively, and said that “the IGCF General Partner Limited (IGCF GP) has received a notice from Sage Venture Limited (Sage) of their intention to submit a proposal (the Proposal) for the acquisition of at least 50% of the Limited Partnership interests”.

He added: “Due to the history of IGCF and its unique circumstances the IGCF GP views the Proposal as potentially attractive to those LPs desiring immediate liquidity.” 

In this letter, he also confirms that “Sage has entered into an agreement with Abraaj Investment Management Limited (In Official liquidation) (AIML) to acquire AIML’s assets and interests related to IGCF, including its majority, controlling stake in the IGCF GP (GP Interests), which is a condition to completing the Transaction.”

The source said that this proves that Deloitte was also a part of the transaction since they are the official liquidators of the AIML. 

In an appendix to that letter, Skelton highlighted developments in Pakistan from a political, currency and economic perspective in a very unfavourable light in what seems like an attempt to influence the recipients of the letter to accept the Sage offer.

KE issues clarification

K-Electric has now been informed that "changes have been consummated involving ÏGCF General Partner Limited (IGCF GP), being the fund manager, and the infrastructure and Growth Capital Fund LP (Fund), being the owner of the Fund assets.

In particular, controlling interests in IGCF GP and certain limited partnership interests in the Fund have been acquired h)' Sage Venture Limited, a British Virgin Islands-registered special purpose company wholly owned by AsiaPak Investments Limited. The Fund's indirect non-controlling shareholding in K-Electric, however, remains unchanged.

The Fund is a Cayman Island registered private investment fund with numerous institutional investors that are managed by the IGCF GP and holds multiple assets, including an indirect non-controlling shareholding in K-Electric. Further, for the sake of clarity, the Fund does not have a controlling interest in K-EIectric nor a controlling position on the K-EIectric Board of Directors."