The Pakistan Credit Rating Agency Limited
03-Feb-21
Analyst
Faiqa Qamar
faiqa.qamar@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Holding Company | 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 Maintains Entity Ratings of Energy Infrastructure Holding (Private) Limited
| Rating Type | Entity | |
|
Current (03-Feb-21 ) |
Previous (07-Feb-20 ) |
|
| Action | Maintain | Maintain |
| Long Term | A- | A- |
| Short Term | A1 | A1 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The ratings reflect Energy Infrastructure Holding (Pvt.) Limited's ('EIHPL' or 'the Company') association with its parent company, Jahangir Siddiqui & Co. Ltd. ('JSCL'). The Company has made investments in LPG Storage and Oil Marketing businesses through its subsidiaries- JS Petroleum and Quality 1 Petroleum, respectively. Lately, EIHPL has acquired 100% ownership of Quality 1 Petroleum (Pvt.) Ltd, an OMC with 30 operational pumps. JS Petroleum, however, is still at initial stages. Amidst Covid-19, the slowdown in economy and respective energy sectors has elongated materialization of envisaged strategy. Being an investment arm of JSCL, both projects are predominantly funded - through equity - by the parent company. However, these projects have a medium-term gestation period and require time to stabilize and become dividend yielding investments. Meanwhile, the Company has a trading portfolio of listed equity investments for steady dividend inflows. The Company has a strong financial profile, represented by 100% equity base.
The ratings are dependent on continued support from 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 holding company are critical. Excessive leveraging, leading to weak coverages and/or deteriorating profitability, will adversely impact the ratings.
About
the Entity
Energy Infrastructure Holding (Pvt.) Limited is a wholly owned subsidiary of Jahangir Siddiqui & Co. Ltd. The Company was incorporated in 2008 as a private limited company under the Companies Ordinance, 1984 (now the Companies Act, 2017). Mr. Hasan Shahid is Chairman of the BoD and Mr. Najmul Hoda Khan is the CEO of the Company. The principal activities of the Company are to invest in energy, petroleum and infrastructure projects.