Lahore, November 25, 2014 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Kohinoor Energy Limited (KEL) at “AA” (Double A) and “A1+” (A one plus) respectively. The ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. The ratings reflect robust financial profile of KEL, supported by a low Leveraged capital structure – project debt paid off.
This is complemented by steady business profile emanating from a secured regulatory structure. This entails sovereign guarantee for timeliness of cash flows, given adherence to agreed performance benchmarks. The ratings recognize KEL’s good operational performance, an outcome of technically sound O and M team, robust systems and controls, and strong governance structure.
The efficiency enhancement project undertaken by the management has started yielding of fuel savings. Although weak financial discipline of sole power purchaser -NTDC- remains the key challenge, the ratings draw comfort from prudent management of the company’s financial obligations. Upholding strong operational performance in line with agreed performance levels would remain a key driver of the ratings. Meanwhile, any significant increase in overdue receivables, as a result of rising circular debt may negatively impact the ratings.
The Company: KEL – an independent power producer (IPP) – commissioned its plant, located at Raiwind, near Lahore, under Power Policy 1994. With a total cost of US$ 138.8mln and capacity of 131.44MW (Dependable capacity of 124MW), the company started its Commercial Operations in June 1997.
KEL, listed on all three local stock exchanges of the country, is majority owned by Toyota Tsusho Coporation (TTC) (36%), followed by the Saigol Group (26%), National Bank of Pakistan (6%) and Wartsila (2%). The remaining shareholding (~30%) is widely dispersed. The board comprises seven individuals including the Chief Executive Officer (CEO) of the company.
It has four representatives of TTC, two of the Saigol group and one from Wartsila, Pakistan. Mr. Tatsuo Hisatomi, the CEO, has a long association with TTC having joined the corporation in 1983. He is assisted by a team of qualified individuals with ignificant experience in the energy business.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
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