The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (22-May-2006)
   

PACRA Maintains Entity Ratings of Pak-Arab Refinery Limited (PARCO) at 'AAA/A1+'
 

 
Analyst
Muhammad Usman Majeed
(+92-42-586 9504)
usman@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-term 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.

PARCO’s ratings reflect continued improvement in refinery margins along with healthy margins on pipeline operations, very strong liquidity, and the continuously improving capital structure, as a result of which the stand-alone risk absorption capacity of the company continues to strengthen. Meanwhile, up till 1HY2009, the guaranteed return on MCR provides sufficient cushion and helps in keeping the bottom line profitability intact regardless of fluctuations in the operating results of the refinery. The company’s business and financial risks, therefore, remain 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 35% of the country’s aggregate refining capacity. It enjoys a GOP guaranteed 25% after-tax return on paid-up capital for the initial eight years. MCR’s commercial operations started in December 2000.
 
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