The Pakistan Credit Rating Agency Limited
31-May-22
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Debt Instrument Rating | Jun-21
- Methodology | Corporate Rating | Jun-21
- Criteria | Correlation Between Long-term & Short-term Rating Scales | Jun-21
- Criteria | Rating Modifiers | Jun-21
Related Research
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PACRA withdraws The Rating of K-Electric Limited | CP-1
| Issuer | K-Electric Limited |
| Instrument | CP - I |
| Amount | PKR 4500 mln |
| Issuance Date | 26-Aug-21 |
| Tenor | 1 Years |
| Redemption Date | 26-Feb-22 |
| Outstanding Amount | - |
| Rating Type | Debt Instrument | |
|
Current (31-May-22 ) |
Previous (30-Nov-21 ) |
|
| Action | Redeem | Initial |
| Long Term | - | AA |
| Short Term | - | A1+ |
| Outlook | Stable | |
| Rating Watch | - | - |
K-Electric Limited (the "Company") has issued the First Privately Placed Commercial Paper (CP-1) of PKR 4,500mln on August 26, 2021. The purpose of the instrument was to finance the Company's working capital requirement. The tenor of the instrument was 6 months and carried a profit rate of 6MK+45bps. The Company has paid in full, all markup and outstanding principal amount in timely manner. The CP-1 has been redeemed on February 26, 2022.
Subsequent to the redemption of the CP-1, the Pakistan Credit Rating Agency (PACRA) has withdrawn the rating of K-Electric Limited | CP-1.
About
the Entity
K-Electric, a vertically-integrated power utility, has been in operations for more than a century. Total installed capacity of K-Electric is 2,000+MW, having an arrangement with National Grids for 1,400 MW. At end-June 21, KES Power Limited (KESP) held 66.4% share in K-Electric, while Government of Pakistan owned 24.4%. KES Power Limited is the major shareholder of the Company. KES Power is a consortium of Al-Jomaih Group of KSA, NIG of Kuwait and IGCF, a private equity fund formerly managed by Abraaj comprised of several Middle East institutional investors. KES Power has entered into a share purchase agreement with Shanghai Electric Power Company Limited (SEP) for sale of up to 66.4% shares of K-Electric against a 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