Prudent Partition Pursued to Propel Plant Profitability

Kot Addu Power Company Limited has resolved to divest a portion of its plant and machinery, specifically Lot-1 gas turbines GT-3 and GT-4 along with associated parts and components. The assets will be sold to Rizwan Steel Private Limited for Rs800 million, aligning with KAPCO’s strategy to optimise its asset base and streamline operations. The disposal targets underutilised equipment, allowing the company to redirect resources towards core operations.

Shareholder Sanction Secured at Significant Special Sitting

The pivotal resolution was approved during the company’s 13th Extraordinary General Meeting convened on July 15, 2025. Shareholders supported the move as a step to unlock value from assets that contribute minimally to revenue. The resolution grants the Board of Directors full authority to manage and execute the sale in the company's interest, reflecting investor trust in management’s strategic vision.

Executive Empowerment Endorsed for Effective Execution

Beyond Board approval, specific operational authority has been delegated to Mr. Shahab Qader Khan, Chief Executive, and Mr. Adolf Anthony Rath, Company Secretary. Their roles include negotiating final terms, drafting and signing necessary agreements, collecting payment, and ensuring all statutory filings and disclosures are completed. This delegation is designed to expedite the sale process while maintaining compliance and transparency.

Regulatory Rigour Required to Realise Realignment

Completion of the transaction is contingent on obtaining mandatory clearances and approvals from the Securities and Exchange Commission of Pakistan, the Pakistan Stock Exchange, and other regulatory bodies. These approvals ensure adherence to corporate governance norms and protect shareholder interests, reinforcing the credibility of KAPCO’s divestment strategy.

Strategic Streamlining Seeks Sustainable Synergy & Savings

The divestment is part of KAPCO’s broader effort to rationalise operations and concentrate on productive assets. By selling equipment that remains idle or underutilised, the company aims to reduce maintenance overheads, enhance operational efficiency, and strengthen its financial position. The proceeds from the sale could potentially support capital expenditure, debt reduction, or other strategic initiatives.

Industry Insight Illuminates Intent & Impact of Initiative

Sector analysts view KAPCO’s decision as reflective of a trend where power producers adapt to evolving market conditions and regulatory expectations by disposing of non-core assets. Such strategic realignment can help companies remain competitive, agile, and better positioned to weather fluctuations in demand and energy pricing.

Fiscal Foresight Fuels Forward-Facing Framework

The Rs800 million transaction underscores KAPCO’s proactive approach to asset management, turning dormant machinery into liquidity. By empowering its leadership team and adhering to due process, KAPCO aligns operational decisions with shareholder value creation, reinforcing confidence among stakeholders and the wider market.

Key Takeaways:

• KAPCO approved the sale of Lot-1 gas turbines GT-3 and GT-4 to Rizwan Steel for Rs800 million.

• The transaction was authorised at the 13th Extraordinary General Meeting held on July 15, 2025.

• Chief Executive & Company Secretary have been empowered to complete negotiations, filings, and payment collection.