Signing Ceremony of Privatisation of Heavy Electric Complex (HEC)

Privatisation Commission hosted the signing ceremony for sale of Heavy Electric Complex (HEC) to IMS Engineering (IMS). This is the first entity-level privatisation in the country in seven years and this was the fifth attempt to sell HEC since 2006.

Per transaction structure approved by the Government, all 96.6% shares of the company were offered for sale in a competitive open-bidding process.  HEC is owned by State Engineering Corporation (SEC) which is under the administrative control of Ministry of Industries and Production (MOIP).  The winning bid of IMS at Rs. 99.999 per share will result in Rs. 1.4 billion of proceeds for the government.  Additionally, IMS will assume all liabilities of the company.  PEL and Waves-Singer were unsuccessful bidders.  

The signing ceremony at the office of PC was attended by officials of PC, MOIP, SEC, IMS, Bank of Khyber and advisors BridgeFactor and AxisLaw.  Speaking at the occasion, Mr. Mahmoodul Haq, CEO of IMS stated, “We are extremely delighted to sign the agreement to acquire HEC and are excited about the prospects of IMS Heavy in the future.  Combined with IMS Engineering and IMS Electric, we will be the only vertically-integrated end-to end electrical contracting and supply company in Pakistan.  We value HEC’s personnel and will grow the workforce to support our investment.  We will not only serve the power transformer needs in Pakistan but also export to regional markets. We have also planned for research-driven product line expansion from power transformers to grid stations in coming years.  Finally, we are grateful to the high professionalism of PC’s team under Saleem Ahmad’s leadership that worked tirelessly to close many gaps in successful execution of this agreement.”

The Federal Minister of Privatisation Mr. Mohammadmian Soomro congratulated the team on the landmark transaction especially given the multiple prior attempts.  “Sale as a going-concern above reserve price despite myriad challenges is a laudable effort.  Operationalizing HEC will help reduce our import bill and encourage export of transformers to other countries”.

Mr. Saleem Ahmad, Chairman PC congratulated IMS and SEC on expeditiously executing the sale purchase agreement, and complimented all stakeholders on coming together as a team to remove bottlenecks.  He acknowledged the promising roadmap shared by IMS that envisions innovation- led revitalization of HEC, which will support the critical power sector in Pakistan and generate export revenues from regional markets.  “I am heartened by the growth plan that will ensure retention of HEC’s experienced personnel and a significant bolstering of its technical workforce.  Elevating human capital, innovation and productivity, while generating attractive return on investment, is central to our philosophy on privatisation.”

IMS Group is an integrated electric power company with a no-limit contracting business and switchgear manufacturer through its acquisition of Schneider Electric’s business in Pakistan. IMS is also the authorized partner of Kawasaki Heavy Industries, MAN Energy Systems, Schneider Electric, ABB, Honeywell and ANSUL. 

PC is in advanced stages of several privatisation transactions. Earlier this month, PC received bids in excess of Rs. 100 billion for NPPMCL, has shortliste d bidders for Pak Steel, and received expressions of interest for House Building Finance Corporation. Earlier PC completed the sale of Services International Hotel.