The Pakistan Credit Rating Agency Limited
27-Feb-18
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Rating Methodology | Jul-17
- Methodology | Correlation between long-term and short-term rating scale | Jun-17
- Methodology | Criteria Modifiers | Jun-17
Related Research
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PACRA Upgrades Entity Ratings of Engro Elengy Terminal (Private) Limited
| Rating Type | Entity | |
|
Current (27-Feb-18 ) |
Previous (26-Apr-17 ) |
|
| Action | Upgrade | Maintain |
| Long Term | A+ | A |
| Short Term | A1 | A1 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The ratings reflect sustained operations of Engro Elengy Terminal (Private) Limited (EETPL). The business profile of EETPL is strong, emanating from GoP's commitment to manage prevailing energy crises in the country by way of imported LNG. Thus, a sizable and recurring stream of income is ensured. SSGC, the sole intermediary (rated "A+"), has demonstrated timely payments against committed purchases despite challenges. Additionally, Stand-By Letter of Credit, covering capacity payments for six months provides comfort. Stable stream of revenue leads to build up of surplus cash, which after making committed payments to lenders would be distributed to sponsors regularly, as per policy, going forward. However, Corporate Guarantee from Engro Corporation soothes financial risk.
The ratings take significant support from EETPL's association with Engro Corporation Limited, which has demonstrated financial strength.
The ratings remain dependent on smooth operations of the terminal, and conduct of SSGC with reference to the timely payments to EETPL. Meanwhile, debt service coverages and other financial related metrics must remain strong.
About
the Entity
EETPL is operating the country's first LNG regasification facility at Port Qasim. The design capacity of the terminal is 600mmcfd. EETPL, is owned by Elengy Terminal Pakistan Limited (ETPL), which, in turn is owned by Engro Corp (80%) and International Finance Corporation (20%).
The board of EETPL comprises three members. During the year 2017, Mr. Jahangir Piracha has joined as the CEO of EETPL. After receiving his bachelors’ degree in Chemical Engineering, Mr. Piracha has gained over 25 years of corporate experience in functions such as manufacturing, human resource, and procurement. He is supported by a team of qualified individuals, primarily comprising technical staff.