Pakistan Credit Rating Agency maintains ratings of Foundation Power Company Daharki Limited

Lahore, April 25, 2013 (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 strong operational profile of the company owing to i) outsourcing of O and M to KEPCO which has demonstrated good performance, and ii) less severity of operational issues relative to its peers, mainly due to lower fuel supply risk.

Although FPCDL is plagued by circular debt involving the entire power chain, it has been able to extend fuel payables to its benefit, minimizing the impact. FPCDL’s association with financially strong sponsor – Fauji Foundation (FF) – is a key rating consideration. FF remains committed and has supported the company in the past. Despite weak financial discipline of the power purchaser, GoP’s guarantee remains a critical rating factor.

For more information, contact:
Hammad Rashid
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com