Pakistani textile firm Sapphire Fibres joins race for IESCO privatisation

The textile firm Sapphire Fibres has announced its intent to participate in the privatisation of Islamabad Electric Supply Company (IESCO). This news was relayed to the Pakistan Stock Exchange (PSX) on Friday. The company's board of directors has given its approval for Sapphire Fibres to join the transaction, though no binding commitments have been made at this stage. The approval is contingent upon pre-qualification by the Privatisation Commission (PC) and all necessary corporate and regulatory approvals.

IESCO's privatisation is part of a wider government plan to sell off several power distribution companies (DISCOs) in an effort to curb transmission losses, improve recovery rates, and elevate service quality. The government had previously invited Expressions of Interest (EOIs) from both local and foreign investors for the privatisation of FESCO, GEPCO, and IESCO, with shares ranging from 51% to 100% and management control. The deadline for submitting an EOI for IESCO was initially set for September 7, 2026.

Post this, the PC Board recommended the Cabinet Committee on Privatisation (CCoP) approve the restructuring plans and schemes of arrangement for FESCO, GEPCO, and IESCO. A government-owned Special Purpose Vehicle (SPV) will be created to extract specific assets and liabilities, establishing a transaction structure fit for commercial purposes.

The CCoP's approval was given for FESCO, GEPCO, and IESCO's restructuring plan, which involves transferring selected assets (including land) and certain liabilities (post-retirement benefits of retired employees) to a government-owned SPV, while current employee benefits stay with the DISCOs.

The deadline for IESCO's EOI submission was extended to September 21, 2026, to accommodate more potential investors. In the past year, IESCO has seen a decline in line losses, dropping from 8.75% to 7.6%.