logo
The Pakistan Credit Rating Agency Limited
Press Release

Date
17-May-22

Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com

Applicable Criteria

Related Research

Disclaimer
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

PACRA withdraws The Rating of K-Electric Limited | Islamic Commercial Paper-21

Issuer K-Electric Limited
Instrument ICP - 21
Amount PKR 4500 mln
Issuance Date 22-Sep-21
Tenor 1 Years
Redemption Date 22-Mar-22
Outstanding Amount -

Rating Type Debt Instrument
Current
(17-May-22 )
Previous
(30-Nov-21 )
Action Redeem Initial
Long Term - AA
Short Term - A1+
Outlook Stable
Rating Watch - -

K-Electric Limited (the "Company") has issued unsecured Privately Placed Islamic Commercial Paper (ICP-21) of PKR 4,500mln on September 22, 2021. The purpose of the instrument was to finance the Company's working capital requirement. The tenor of the instrument was 6 months and carried a profit rate of 6MK+30bps. The Company has paid in full, all markup and outstanding principal amount in timely manner. The ICP-1 has been redeemed on March 22, 2022.
Subsequent to the redemption of the ICP-21, the Pakistan Credit Rating Agency (PACRA) has withdrawn the rating of K-Electric Limited | ICP-21.

About the Entity
K-Electric, a vertically-integrated power utility, has been in operations for more than a century. Total installed capacity of K-Electric is 2,000+MW, having an arrangement with National Grids for 1,400 MW. At end-June 21, KES Power Limited (KESP) held 66.4% share in K-Electric, while Government of Pakistan owned 24.4%. KES Power Limited is the major shareholder of the Company. KES Power is a consortium of Al-Jomaih Group of KSA, NIG of Kuwait and IGCF, a private equity fund formerly managed by Abraaj comprised of several Middle East institutional investors. 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.