K-Electric’s Short-Term Sukuk Rated A1+ by VIS

KARACHI: VIS Credit Rating Company Limited has finalized the instrument ratings for K-Electric Limited’s short-term Sukuk-30, assigning it an A1+ rating. This rating reflects the strongest likelihood of timely repayment of short-term obligations, backed by outstanding liquidity factors. The instrument rating aligns with K-Electric’s entity ratings of AA/A1+.

K-Electric has issued an unsecured, privately placed short-term Sukuk amounting to PKR 7 billion as of March 13, 2025. The Sukuk has a tenor of up to six months and is set to mature on September 15, 2025. The proceeds from this issuance are intended to support the company’s working capital requirements.

K-Electric plays a strategic role in supplying power to Karachi, Pakistan’s financial hub, and remains committed to maintaining uninterrupted service. However, the company has faced delays in obtaining approvals for individual tariffs related to transmission, distribution, and supply from NEPRA for the fiscal years 2024 to 2030. The complete approval of the Multi Year Tariff (MYT) hinges on these approvals, impacting the finalization of financial statements post-FY23.

The management of K-Electric reports that the company’s cash flow position and debt profile have remained stable. They anticipate maintaining this stability in the future. Following the alignment of the MYT with the company’s future investment plans, an increase in debt levels is expected. Nevertheless, K-Electric’s management assures that all debt obligations are being met on schedule and will continue to be serviced in a timely manner.