PACRA Maintains Entity Ratings of Halmore Power Generation Company Limited

Halmore Power Generation Company Limited (Halmore Power) runs a 225MW power plant. The company operates in the regulated power sector. It enjoys sovereign guarantee against receivables from power purchaser - CPPA-G - given adherence to agreed performance benchmarks. The Company's operations and maintenance operator, General Electric International (GE), is a key source of comfort in managing the plant's operations. The company's financial risk profile is largely dependent on repayment behavior of the power purchaser. In recent period, availability of primary fuel was adequate on account of better energy mix; hence operational performance remained intact. Additionally, because of the mounting receivables and consequent funding thereof from banking lines, remaining cushion in the available working capital facilities is limited, warranting further space to be created. As of Dec-18, short term lines utilization stood at 97%. Halmore Power has total long-term debt of PKR 3,642mln as at end-Mar19 payable till September 2020. The company avails forbearance period while meeting its financial obligations.
Upholding operational performance in line with agreed performance levels would remain a key rating driver. Accumulation of circular debt would pose threat to the company’s ability to continue with this practice. Any significant increase in overdue receivables, as a result of rise in circular debt, may impact the ratings.

About the Entity
Halmore Power Generation Company Limited, an Independent Power Producer (IPP) with gross capacity of 225 MW, operating under 2002 power policy, is a combined gas cycle turbine plant with gas as primary and HSD as secondary fuel. The company commenced commercial operations in June 2011. Mian Muhammad Sharif – a non-resident Pakistan business magnate – owned 99.99% shares of the company however during the year after his demise his shareholding has been transferred to his son Mian Karim ud Din.

The four-member Board of Directors (BoD), including one executive director, is representative of the sponsoring family. Mr. Zaheer Ahmed is the Chief Executive Officer, he has over 26 years of experience in construction, operation and maintenance of power generation and transmission.