The Pakistan Credit Rating Agency Limited
16-Apr-21
Analyst
Timnat Thomas
timnat.thomas@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Ratings | Jun-20
- Methodology | Debt Instrument | Jun-20
- Methodology | Correlation Between Long-Term And Short-Term Rating Scale | Jun-20
- Criteria | Rating Modifier | Jun-20
Related Research
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PACRA Withdraws Rating of K-Electric Limited | Islamic Commercial Paper-11 of PKR 3,200mln
| Issuer | K-Electric Limited |
| Instrument | |
| Amount | PKR 3200 mln |
| Issuance Date | 09-Sep-20 |
| Tenor | 0 Years |
| Redemption Date | 09-Mar-21 |
| Outstanding Amount | - |
| Rating Type | Debt Instrument | |
|
Current (16-Apr-21 ) |
Previous (08-Oct-20 ) |
|
| Action | Redeem | Initial |
| Long Term | - | AA |
| Short Term | - | A1+ |
| Outlook | Stable | |
| Rating Watch | - | - |
K-Electric issued an unsecured Privately Placed Islamic Commercial Paper (ICP-11) of PKR 3,200mln to finance the company’s working capital requirements on 09-Sep-2020. ICP-11 was part of series of instruments comprising ICPs which will be utilized for funding K-Electric working capital requirements. The tenor of ICP-11 was 6 months and carried a profit rate of 6 months KIBOR+85bps. The profit amounting to PKR 124mln was paid on the outstanding principal at the time of maturity. The Islamic Commercial Paper matured in six months from the date of issue in March 2021.
Subsequent to the redemption of the Islamic Commercial Paper, the Pakistan Credit Rating Agency (PACRA) has withdrawn the rating of K-Electric Limited | Islamic Commercial Paper-11
About
the Entity
K-Electric, a vertically integrated power utility, has been in operations for more than a century. The total installed capacity of K-Electric is 2,267MW, having an arrangement with external power producers for 1,400 MW including 800 MW from the National Grids. At end-Jun20, KES Power Limited (KESP) held a 66.4% share in K-Electric, while the Government of Pakistan owned 24.4%. KES Power majority is owned (53.8%) by Abraaj Capital (Private Equity Group) with the balance held by a group of investors (Al Jomaih, Saudi Arabia and NIG, Kuwait). KES Power has entered into a share purchase agreement with Shanghai Electric Power Company Limited (SEP) for the sale of up to 66.4% shares of K-Electric against consideration of US$ 1.77bln. The transaction is in process and will close once customary closing conditions and requisite regulatory approvals are obtained. K-Electric has thirteen member board. Mr Moonis Alvi, CEO is associated with the company since 2008. He is supported by an experienced team.