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The Pakistan Credit Rating Agency Limited
Press Release

Date
12-May-20

Analyst
Sana Shameen
sana.shameen@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

K-Electric Limited redeems Islamic Commercial Paper upto PKR 9,491mln | Sep-19 fully redeemed; rating withdrawn

Issuer K-Electric Limited
Instrument CP
Amount PKR 9491 mln
Issuance Date 19-Sep-19
Tenor 0 Years
Redemption Date 19-Mar-20
Outstanding Amount -

Rating Type Debt Instrument
Current
(12-May-20 )
Previous
(25-Nov-19 )
Action Redeem Maintain
Long Term - AA
Short Term - A1+
Outlook - Developing
Rating Watch - Yes

Under the Islamic Commercial Paper program, K-Electric issued two Islamic Commercial papers: ICP1 & ICP2 in August-18 and March-19. After the maturity of the two instruments, K-Electric issued the third unsecured Islamic commercial paper of PKR 9,491mln to finance the ongoing working capital requirements. The Commercial Paper had a tenor of six months, carried a profit rate of 6MK + 130bps and was scheduled to be redeemed at face value on the maturity date. The instrument due for the final redemption in March-20, has been fully redeemed.
Subsequent to the completion of the redemption process, the Pakistan Credit Rating Agency (PACRA) has withdrawn the rating of K-Electric Limited | Islamic Commercial Paper of PKR 9.4bln | Sep-19.

About the Entity
K-Electric, a vertically-integrated power utility, has been in operations for more than a century. At end-Jun19, KES Power Limited (KESP) held 66.4% share in K-Electric, while Government of Pakistan owned 24.4%. KES Power majority is owned (53.8%) by Abraaj Capital (Private Equity Group) with the balance held by a group of investors (Al Jomaih, Saudi Arabia and NIG, Kuwait). KES Power has entered into a share purchase agreement with Shanghai Electric Power Company Limited (SEP) for sale of up to 66.4% shares of K-Electric against a consideration of US$ 1.77bln. The transaction is in process and will close once customary closing conditions and requisite regulatory approvals are obtained. K-Electric has thirteen member board. Mr. Moonis Alvi, CEO is associated with the company since 2008. He is supported by an experienced team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.