Sapphire Fibres joins GEPCO privatisation race -

Sapphire Fibres Limited has formally expressed interest in participating in the privatisation of Gujranwala Electric Power Company (GEPCO), becoming one of the latest major Pakistani business groups to enter the government’s power-sector privatisation programme.

According to the information disclosure submitted to the Pakistan Stock Exchange, Sapphire Fibres has obtained the Request for Statement of Qualification (RSOQ) issued by the Privatisation Commission for the proposed divestment of GEPCO through privatisation.

The company’s Board of Directors has approved its participation in the transaction. However, Sapphire Fibres clarified that it has not assumed any binding obligation at this stage. Its participation remains subject to pre-qualification by the Privatisation Commission as well as the completion of all required corporate and regulatory approvals.

The company said it may also form a consortium once the necessary approvals are obtained and would keep the Pakistan Stock Exchange informed of any material developments.

The move comes as the government accelerates the privatisation of electricity distribution companies (DISCOs), with GEPCO among the first batch of distribution companies being offered to private investors.

GEPCO’s privatisation has attracted substantial interest from both domestic and international investors. According to recent reports, 11 Expressions of Interest (EoIs) were submitted for GEPCO, including proposals from three Turkish companies, one Saudi investor and several major Pakistani business groups. The local participants include Engro Energy, Sapphire Fibres, Hub Power Holdings and Lucky Cement, Shirazi Investments, Artistic Milliners, Fatima Group, K-Electric, AKD Securities, Fast Cables and Mughal Steel Group.

The government is seeking private-sector participation with the objective of improving the operational and financial performance of DISCOs, reducing transmission and distribution losses, strengthening recoveries and improving the quality of electricity services.

Sapphire Fibres’ latest move also highlights the growing interest of large industrial groups in Pakistan’s electricity distribution sector. The company has been expanding its presence in the energy business and last year acquired a 50 percent stake each in Uch Power and Uch-II Power, gas-based power plants with capacities of 586MW and 404MW respectively.

GEPCO is part of the government’s broader DISCO privatisation programme, alongside Faisalabad Electric Supply Company (FESCO) and Islamabad Electric Supply Company (IESCO) in the first phase. FESCO has also attracted strong investor interest, with 12 domestic and international groups submitting Expressions of Interest for a controlling stake and management control.

The participation of Sapphire Fibres and other major industrial groups suggests that the proposed DISCO transactions are being viewed not only as privatisation exercises but also as opportunities to acquire and restructure large electricity distribution businesses.

However, Sapphire Fibres’ participation in the GEPCO process remains at the initial pre-qualification stage and should not be interpreted as an acquisition or final investment commitment.

The Privatisation Commission will evaluate the interested parties before determining which investors qualify to proceed to the subsequent stages of the transaction.

For Engineering Review, the larger question is whether the entry of industrial and energy-sector groups into DISCO privatisation can bring the investment, technology, management reforms and distribution efficiency needed to address Pakistan’s long-standing power-sector problems. – ER News Desk

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