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Lahore, June 27, 2014 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short term ratings of PLHC at “AA-” (Double A minus) and “A1+” (A one Plus), respectively.
The rating of the PPTFC of PKR 750mln has been maintained at “AA” (double A), while preliminary rating of AA (double A) has been assigned to the proposed, secured PPTFC of PKR 1,500mln. The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The ratings reflect the joint ownership of PLHC by the Governments of Pakistan and Libya. On a standalone basis, the company has managed to ease out pressure on its overall performance. Here in addition to improvement in net interest income, sizable contribution came from other operating income.
The management, is making continuous efforts to achieve the targets envisaged in its detailed business plan, however, the efficacy of the plan, in terms of tangible outcomes in a highly competitive operating environment remains to be seen.
Furthermore, the company is strengthening its management structure and control environment, which are expected to benefit its prospects. PLHC is aggressively pursuing for recovery of its exposure in Kamoki Energy Limited (KEL) through winding up process.
Nevertheless, this exposure, with the exception of limited forced sale value benefit, has been provided. The company is short on minimum capital requirement (shortfall of PKR 2.6bln as at end-Mar14) for which the shareholders are yet to form a conclusive equity injection plan.
Hence, the ratings carry negative outlook. Going forward, the management’s ability to successfully implement its strategy, while managing the associated risks, would remain critical for the ratings. Meanwhile, development of sustainable profitability remains crucial.
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
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