The Pakistan Credit Rating Agency Limited
Press Release


Madiha Sohail

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PACRA Maintained the Rating of Cnergyico Pk Limited | Sukuk | Jan-17

Rating Type Debt Instrument
(25-Nov-22 )
(26-Nov-21 )
Action Maintain Maintain
Long Term AAA AAA
Short Term - -
Outlook Stable Stable
Rating Watch - -

Cnergyico Pk Limited ("Cnergyico" or "the Company") possesses a notable share in meeting the economy's demand for petroleum products, with its refinery and marketing business. Cnergyico's refinery business remains exposed to the change in international crude and petroleum products (POL) prices, which in turn, steer the gross refining margins (GRMs) of the Company. Due to country-wide deluge, product demand particularly High-Speed Diesel (HSD) shrunk by over 40%. Further, an extremely low refinery throughput resulted in a gross loss of PKR 4.6 bln in 1QFY23 compared to the gross profit of PKR 751mln in the same period last year. However, Cnergyico's financial risk profile is well managed even in a challenging position with essential borrowings to cater the working capital needs and also stands range-bound. Nonetheless, Cnergyico stands out in embarking on a new strategic venture to upgrade its refinery process in order to cope with the key challenges prevailing in the sector.
The ratings are a reflection of Cnergyico's largest capacity and efficient processes that enable the Company to effectively shield its business profile from external vulnerabilities. Improved performance indicators and promising financial discipline, are imperative to the ratings.

About the Entity
Cnergyico, incorporated in 1995, is listed on the Pakistan Stock Exchange. It is engaged in the manufacturing, production, and sale of a large range of petroleum products via its refinery and marketing segments. With an aggregate designed capacity of ~156,000 bpd, Cnergyico has the highest refining capacity, in the country. The Company is a subsidiary of Cnergyico Mu Incorporated (CMI) (formerly Byco Industries Incorporated (BII)), Mauritius, which currently holds 69.83% shares in the Company after divestment/sale of 22% shares by IGCF Oil & Gas Limited (formerly Abraaj Mauritius Oil & Gas Limited (AMOGL)), while the rest is spread among other Financial Institutions and General Public.
About the Guarantor:
GuarantCo Limited ("GCL") was incorporated in 2005. GCL has executed fifty-seven projects with exposure in twenty-seven countries to date. The ultimate ownership of GCL lies with five governments, four of which (United Kingdom, Sweden, Switzerland, and Australia) own through Private Infrastructure Development Group (PIDG) Trust, the Netherlands maintains its stake through FMO (a Dutch development bank) and PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GCL is rated 'AAA' by PACRA and Bloomfield Investment, 'AA-' by Fitch, and 'A1' by Moody's.

About the Instrument
Cnergyico issued a rated, secured, privately placed Islamic certificate Cnergyico Pk Limited | Sukuk | Jan-17 ("Sukuk") of PKR 3,120mln in Jan'17 to finance capital expenditure towards the expansion of the Company's power, storage, and processing infrastructure. The Sukuk has a tenor of six (6) years. The profit is being paid quarterly in arrears at the rate of 3MK+1.05% p.a. The principal repayment commenced from Apr'19. The Company paid a 23rd rental payment of the Sukuk in Oct'22. Sukuk is being redeemed in Jan'23.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.