The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (30-December-2004)
   

PACRA Maintains PARCO's Entity Rating at 'AAA'
 

 
Analyst
Iram W. Butt
(+92-42-586 9504)
iram@pacra.com

 

 

 









 

 

 

 

Disclaimer
This press release is transmitted to you for this sole purpose of dissemination through your newspaper/magazine/agency. The press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to PACRA. However, PACRA has the sole right of distribution of its press releases for consideration or otherwise through any media.

  

The Pakistan Credit Rating Agency (PACRA) has maintained the long and short term entity rating of Pak-Arab Refinery Limited (PARCO) at “AAA” (triple A) and “A1+” (A one plus), respectively. The ratings denote the lowest expectation of credit risk and an exceptionally strong capacity for timely payment of financial commitments. Meanwhile, since the secured TFC issue of PKR 2.5 bln stands redeemed, the rating of the instrument is withdrawn.

PARCO's ratings reflect the high margins on pipeline operations and the GOP guaranteed 25% minimum return on the paid-up capital attributable to the Mid Country Refinery (MCR). The guaranteed return on MCR provides sufficient cushion and helps in keeping the bottomline profitability intact regardless of fluctuations in the operating results of the refinery. The company's business and financial risk, therefore, remains extremely low.

About the company: PARCO, an unlisted public limited company, was established in 1974 as a joint venture between the Government of Pakistan (60%) and the Emirate of Abu Dhabi (40%). The company owns and operates Pakistan's longest oil pipeline network, extending from Karachi to Mehmood Kot near Multan. Forming an important link in the transport of petroleum products upcountry, the pipeline system was extended to Machhike near Lahore in 1998, and presently spans 1,228 km. PARCO's MCR, with a capacity of 4.5 mln tonnes per annum (tpa), is the largest refining complex representing around 40% of the country's aggregate refining capacity. MCR's commercial operations started in December 2000.
 
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