The Pakistan Credit Rating Agency Limited
26-Jan-23
Analyst
Ahmad Faraz Arif
ahmad.faraz@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Correlation Between Long-term & Short-term Rating Scales | Jun-22
- Methodology | Rating Modifiers | Jun-22
- Methodology | Holding Company Rating | Jun-22
Related Research
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PACRA Maintains Entity Ratings of Energy Infrastructure Holding (Private) Limited
| Rating Type | Entity | |
|
Current (26-Jan-23 ) |
Previous (03-Feb-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | A- | A- |
| Short Term | A1 | A1 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The ratings reflect Energy Infrastructure Holding (Pvt.) Limited's ('EIHPL' or 'the Company') association with its parent company, Jahangir Siddiqui & Co. Ltd. ('JSCL'). The Company has made investments in LPG storage and engineering sectors through its subsidiaries- JS Petroleum Ltd. and JS Engineering Investments (Pvt.) Ltd., respectively. JS Petroleum, however, is still in process of establishing an LPG storage terminal at Port Qasim and awaiting approval. Amidst economic challenges in the respective energy sector, the materialization of the envisaged strategy has been elongated. The management is evaluating investment projects for JS Engineering. Being an investment arm of JSCL, investment projects are predominantly funded - through equity - by the parent company. However, the current projects of the Company have a medium-term gestation period and require time to stabilize and become dividend-yielding investments. Meanwhile, the Company has a strategic investment in the associated company and a trading portfolio of listed equity investments for steady dividend inflows. Materialization of long-term projects and envisioned strategies is anticipated to amplify the financial performance and investments portfolio. The Company has a strong financial profile, represented primarily by equity base and minimal debt.
The ratings are dependent on continued support from the parent company. Realization of the envisioned investment plans and formalization of a strong and effective mechanism for monitoring performance and providing holistic direction as a holding company are critical for the ratings.
About
the Entity
Energy Infrastructure Holding (Pvt.) Limited is a wholly owned subsidiary of Jahangir Siddiqui & Co. Ltd. The Company was incorporated in 2008 as a private limited company under the Companies Ordinance, 1984 (now the Companies Act, 2017). Mr. Muhammad Babar Din is the Chairman of the BoD. While, Mr. Mirza Zyad Baig is the CEO of the Company. The principal activities of the Company are to invest in energy, petroleum, and infrastructure projects.