PACRA Assigns Preliminary Rating to Gas & Oil Pakistan Limited | GO Short Term Sukuk | PKR 10bln | TBI

Gas & Oil Pakistan Limited ("GO" or "the Company") benefits from a strategic partnership with Aramco, which holds an equity stake of ~40%, leveraging the global energy giant's resources to reshape Pakistan’s OMC landscape and GO’s market position. The financially sound sponsors contribute deep expertise across the energy supply chain, while governance has been reinforced through the induction of Aramco's representatives onto the Board of Directors and into key management roles. Future growth is expected to be augmented by entry into the lubricants segment via Valvoline. Operationally, GO maintains a substantial footprint, running an extensive retail network of about 1,329 outlets, including 75 COCO sites, many successfully rebranded under the Aramco name. Furthermore, the Company boasts the second-largest storage capacity in the sector at ~205,038 metric tons and supplements its income through hospitality services. Its operations encompass the procurement, storage, distribution, and marketing of petroleum, oil, and lubricants (POL) sourced both locally and internationally. Ranked among the top-tier OMCs by both volumetric sales and retail presence, GO has successfully stabilized its business and financial risk profile. Financially, the Company has demonstrated exponential topline growth (83.3% in 9MCY25 and 36.1% in CY24) with improving profitability, a trajectory expected to persist due to effective marketing initiatives and sustained, stable cash flows. While trade debts, mainly from government entities, corporate customers, and dealers, stood at ~PKR 52.8bln as of 9MCY25. The growth in these receivables (about ~44% compared to CY24) is substantially slower than the annualized revenue growth (about ~85%), reflecting GO’s disciplined focus on working capital management. This is strengthened by the implementation of a Board-approved credit policy and is expected to rationalize further, going forward. The capital structure has been significantly strengthened by an equity injection from Aramco via a rights issue. GO’s working capital position is further supported by considerable supply credit extended by Aramco. This reduces reliance on borrowings from financial institutions, despite ample available credit lines. This, coupled with strong coverage, provides the necessary financial cushion. To further finance its working capital requirements, the Company now plans to issue a Short-Term, Rated, Unsecured, Privately Placed Sukuk of ~PKR 10bln.
The ratings are dependent on keeping the growth trajectory, as a consequence of the above mentioned association with Aramco including continuity of governance and other control related matters.

About the Entity
GO was incorporated as a public unlisted company in 2012 under the repealed Companies Act 2017. The Company obtained the OMC license from OGRA in 2019. GO is engaged in the procurement, storage, distribution, and marketing of POL products and lubricants. Aramco holds ~40% stake in the Company, while ~60% stake resides with GO. The Company has a ten-member Board; four members represent Aramco, and six are nominated by GO. Mr. Tariq Kirmani chairs the Board, while Mr. Khalid Riaz heads the Company as the CEO. To enhance transparency, a few prominent management positions are appointed by Aramco. Other members of the Board and the management are also seasoned professionals.

About the Instrument
Gas and Oil Pakistan Limited ('GO' or 'the Company') intends to issue a Short Term, Rated, Unsecured and Privately Placed Sukuk (Sukuk). The size of the Sukuk will be PKR 10bln with a green shoe option of PKR 4bln, and holds a tenor of 6 months from the date of the drawdown. The Sukuk carries a profit rate of 6MK + 40bps (tentatively). The proceeds of the Sukuk will be used to finance the working capital requirements of the Company. The face value of each Sukuk certificate will be ~PKR 1mln only, and the Sukuk will be redeemed in a bullet payment on the expiry of the tenor.