SHANGHAI Electric Power Co. is nearing a deal to acquire a controlling stake in Pakistani utility K-Electric Ltd. from buyout firm Abraaj Group, people familiar with the matter said.

    The State-backed Chinese company has been in exclusive negotiations to buy Abraaj’s 66 percent stake in the US$2.4 billion power generator, the sources said. A formal agreement could come as early as this week, though the timing is still fluid, the sources said.

    Pakistani regulations would require Shanghai Electric to make a mandatory offer to minority shareholders of K-Electric, according to the sources. Negotiations are ongoing and talks could still falter, the sources said.

    A deal to buy out all of K-Electric would be the biggest acquisition in Pakistan for at least a decade as well as Shanghai Electric’s biggest overseas purchase. Shanghai Electric emerged as the lead bidder for the stake last month after submitting the highest offer, people familiar with the matter said at the time.

    K-Electric had also drawn interest from Chinese clean energy group Golden Concord Holdings Ltd., French utility Engie SA and at least one investment fund, people with knowledge of the matter said in August.

    Shanghai Electric said in an Oct. 13 statement its parent company was considering a transaction that may require it to issue shares or raise funds. It said that due diligence was still in progress and the deal would be subject to government approvals.

    The Chinese company said in a separate filing in August that it was doing preliminary preparation work to buy a stake in K-Electric.

    K-Electric, formerly known as Karachi Electric Supply Co., serves more than 2.2 million customers in and around the Pakistani city and employs nearly 11,000 people, according to its website. (SD-Agencies)