Lahore, April 08, 2015 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Foundation Power Company Daharki Limited (FPCDL) at “A+” (Single A Plus) and “A1″ (A One) respectively. The ratings denote a low expectation of credit risk.
The ratings reflect FPCDL’s strong business profile emanating from a secured regulatory structure. This provides cushion to the company whereby adherence to agreed upon performance parameters, set under the Power Purchase Agreement (PPA), would insulate the company from any major business risk.
The ratings recognize successful management of operations and maintenance (O and M) by an international operator – KEPCO, with an established track record that has enabled strong operational performance in line with agreed parameters.
By virtue of specialized nature of fuel – low BTU gas – and sharing the same sponsor, fuel supply risk is considered low. The company’s financial risk profile remains prone to volatility in cash flow receipts from the power purchaser. To manage its working capital requirements, the company leverages its commercial obligations; stretching payables to Mari Petroleum Company Limited – the fuel supplier.
Besides, short-term borrowing lines are maintained to fund any short-fall in debt servicing and/or dividend payments. FPCDL’s association with financially strong sponsor – Fauji Foundation (FF) – is a key rating consideration. FF remains committed and has supported the company.
The ratings of FPCDL are dependent on its ability to continue adhering to agreed performance benchmarks. Meanwhile, improvement in managing commercial obligations and sustainability of timely debt repayment remains 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
Category: General Business News