Shanghai Electric has terminated its agreement to acquire a 66.40% stake in K-Electric.
Multiple sources claimed that according to the notice sent to the Shanghai Stock Exchange, Shanghai Electric confirmed that after reviewing the proposed acquisition in its Board of Directors meeting, the decision made to end the deal.
Shanghai Electric K-Electric Deal Overview
The agreement signed for the purchase of 18.3 billion shares, representing 66.40% of K-Electric’s equity, from KES Power Limited. The transaction valued at around USD 1.77 billion, with an additional USD 27 million performance-linked incentive depending on K-Electric’s operating results.
Reasons for Ending the K-Electric Shares Acquisition
Shanghai Electric stated that the counterparty failed to meet several conditions precedent required under the Share Purchase Agreement. Regulatory delays and tariff issues were also major obstacles.
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The multi-year tariff framework by NEPRA affected profitability and valuation.
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Revised valuation proposals by Shanghai Electric were not accepted.
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Pakistan’s energy sector challenges, including circular debt, added further risk.
Shanghai Electric Termination Notice
On September 9, 2025, the board of Shanghai Electric adopted a resolution which was titled: Terminating and Writing Off the Equity Acquisition of KE Pakistan. The firm officially informed the Shanghai Stock Exchange about the move.
Shanghai Electric clarified that the termination of the K-Electric acquisition deal will not have a material impact on its operations or financial position.
Impact on K-Electric Pakistan
The deal was originally announced in 2016 and remained pending due to regulatory approvals and conditions precedent. The Shanghai Electric K-Electric acquisition termination marks the end of one of Pakistan’s longest-running foreign investment negotiations in the power sector.
K-Electric continues to operate under KES Power Limited as the majority shareholder, while the failure of this transaction raises questions about the future structure of equity in Pakistan’s largest power utility.
