Karachi, Hub Power Holdings Limited, a subsidiary of The Hub Power Company Limited (HUBCO), continues to strengthen its position in Pakistan's energy sector. The company's focus on expanding energy generation capacity through indigenous resources and strategic investments has contributed significantly to its stable entity ratings.
According to The Pakistan Credit Rating Agency Limited, Hub Power Holdings, established as a wholly owned subsidiary of HUBCO, plays a vital role in the energy sector with a generation capacity that has increased from 1,292MWs to 3,581MWs. The company has made key investments in China Power Hub Generation Co. (Pvt.) Ltd. and ThalNova Power Thar (Pvt.) Ltd., holding ownership stakes of 47.5% and 38.3% respectively. In December 2022, Hub Power Holdings successfully completed the acquisition of ENI's upstream business operations in Pakistan, forming a joint venture known as Prime International Oil &amp; Gas Co. Additionally, the company entered into a joint venture to establish China Power Hub for the operation and maintenance of China Power's plant, holding a 49% share.
The company's business risk profile is significantly influenced by profit-sharing arrangements with its associated entity, China Power, which consistently receives capacity payments. China Power achieved its project completion date in February 2023, whereas ThalNova has yet to announce its project completion date. During the fiscal year 2023, Hub Power Holdings experienced a substantial surge in profitability, reaching PKR 25.7 billion, up from PKR 4.6 billion in FY22. This increase was primarily due to a rise in income from related parties, which included a significant share of profit from China Power Hub Generation.
Hub Power Holdings Ltd., established in 2015, is focused on capitalizing on emerging opportunities within the energy sector. The company is chaired by Mr. Aly Khan and led by CEO Mr. Kamran Kamal. The company's recent issuance of a secured, privately placed Islamic Certificates (Sukuk) totaling PKR 6 billion is aimed at addressing debt obligations at the group level. The Sukuk has a 5-year tenor, with a grace period of 3 years, and features a fixed rate of 6M KIBOR plus 250 basis points for semi-annual profit payments. The principal amount is to be repaid in four equal semi-annual installments and is fully secured under PR-6 Regulation of the State Bank of Pakistan.
The construction of an effective mechanism for making consolidated investments and evaluating their performances in a holding company is an ongoing critical process for Hub Power Holdings. The company's performance and strategic investments, supported by the expertise and business acumen of its sponsors, positively contribute to its credit ratings.
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