The Pakistan Credit Rating Agency Limited
08-Feb-19
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Ratings | Jun-18
- Methodology | Criteria | Rating Modifier | Jun-18
- Methodology | Correlation Between Long-Term And Short-Term Rating Scale | Jun-18
- Methodology | Holding Company | Jun-18
Related Research
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PACRA Assigns Initial Entity Ratings to Energy Infrastructure Holding (Pvt.) Limited
| Rating Type | Entity | |
|
Current (08-Feb-19 ) |
||
| Action | Initial | |
| Long Term | A- | |
| Short Term | A1 | |
| Outlook | Stable | |
| Rating Watch | - | |
The ratings reflect Energy Infrastructure Holding (Private) Limited's association with its Parent Company, Jahangir Siddiqui & Co. Ltd. (JSCL). The Company started its journey in 2008 to invest in energy projects. The Company, through its subsidiaries, JS Petroleum and JS Fuel has entered in LPG Storage and Oil Marketing businesses. Both the projects are in initial stages and have a medium term gestation period and will take some time to stabilize and become dividend yielding investments. The projects are predominantly being funded by the ultimate Parent Company, Jahangir Siddiqui & Co. Ltd. through equity injection in the Company. Meanwhile, the Company has a portfolio of listed equity investments for steady dividend inflows. The Company has an adequate financial profile, represented by 100% equity base. The Company is expected to limit borrowings to the extent of debt ratios that finance cost is adequately covered through dividend income.
The ratings are dependent on continued support of 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 HoldCo are critical. Excessive leveraging, leading to weak coverages and profitability, will have negative impact on ratings.
About
the Entity
Energy Infrastructure Holding (Private) Limited (the Company) is a private limited company, wholly owned by Jahangir Siddiqui & Co. Ltd. The Company was incorporated on April 15, 2008 under the Companies Ordinance, 1984 (now the Companies Act, 2017). The principal activities of the Company are to invest in energy, petroleum and infrastructure projects. Mr. Hasan Shahid is Chairman of the BoD and Mr. Najmul Hoda Khan is CEO of the Company.