PACRA Maintains Entity Ratings of Total PARCO Pakistan Limited

Total PARCO Pakistan Limited's ('Total PARCO' or 'the Company') ratings hold association with considerably strong and financially stable sponsors holding considerable presence across the energy supply chain. Total PARCO has held its mark as the largest international OMC operating in Pakistan. This along with sustaining the second-largest market share in the local OMC sector provides Total PARCO room to support the regulators. This can impact the overall structural landscape of the downstream OMC sector. Overall business and financial risk is managed well. The topline and profits remain sustainable. This along with the strategic decision to retain profits over an extended period has strengthened the Company's overall financial footing. Despite lower volumes due to weak demand and regulated pricing of PoL products, the Company remains adept in posting strong financial performance. Total PARCO's marketing and operations generate fairly stable cash flows, despite the volatility in international oil market prices and other persistent risks. The Company emphasizes a well-built and customer-centric strategy. Holding a contemporary vision well-aligned with the global energy transition, a recent structural shift in the Company's shareholding has been observed by bringing in Aquashore - a UAE-based subsidiary of Gunvor Group (Gunvor), a renowned and well-positioned global commodity trader - as a strategic acquirer of Total Energies Marketing Services (TMS) stake; hence, assigns a rating watch. This seems to shape new dynamics for Pakistan's OMC sector and the Company, going forward.
The ratings are driven by the Company's preserved financial metrics. Moreover, strategic initiatives including sustainable development goals benefits the ratings. This along with sound governance framework and control environment are in compliance with the overall operations. However, timely materialization of said acquisition is imperative.

About the Entity
Total PARCO Pakistan Limited ('Total PARCO' or 'the Company') is an unlisted public limited company. The principal activity of the Company is the marketing and sale of petroleum products. Lately, Gunvor Group (Gunvor) - through Aquashore – has acquired the entire stake of TotalEnergies Marketing and Services (TMS) (~50%) in the Company. While, Pak Arab Refinery Limited (PARCO) holds the remaining (~50%) JVs share. All legal and filling formalities are complete, and the BoD composition has also changed accordingly. The Company has a six-member Board. Three members represent PARCO and the other three are lately nominated by Gunvor. To enhance transparency in the practices of the Board, the Chairman is nominated by PARCO. The CEO of the Company, Mr. Asif Iqbal, enjoys the expertise of over 25 years in country management, retail, oil distribution/marketing, supply chain, and operations. His diverse experience spans numerous Asian countries within one of the largest energy groups in the world. Other members of the management, as well, are seasoned professionals with an average experience of more than 2 decades.