Lahore, March 10, 2016 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Saif Power Limited (SPL) at “A+” (Single A Plus) and “A1” (A One) respectively. The ratings denote a low expectation of credit risk.
The ratings reflect strong business profile of SPL emanating from the demand risk cover under PPA signed between NTDC and the company. The implementation agreement further provides sovereign guarantee for cash flows, given adherence to agreed performance benchmarks. The ratings incorporate low operational risk, a result of established performance credentials of GE – the O and M operator.
The company mainly operates on HSD due to non-availability of gas. Meanwhile, delayed receivables put pressure on financial risk profile. Nevertheless, high retention of profits helps the company to reduce reliance on short term borrowings. The company’s association with Saif Group provides comfort to the ratings.
The Government of Pakistan has finalized LNG import deal with Qatar, ensuring more supply to the power sector. This is likely to relieve some pressure on inter-corporate debt, in turn, working capital requirements of the sector. However, merit order and supply dynamics are yet to be finalized. Meanwhile, upholding operational performance in line with agreed performance levels would remain important.
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