PACRA Assigns Preliminary Ratings to Lucky Electric Power Company Limited - PPSTS-23 - PKR 6bln - TBI

Lucky Electric Power Company Limited ("LEPCL" or "the Company") has set up a 1x660MW (gross) coal-fired power plant. The project achieved COD in March 2022 and is successfully connected to and providing electricity to the grid. The primary fuel is coal; a coal supply agreement is signed with Sindh Engro Coal Mining Company (SECMC). SECMC will provide coal from its developing Block-II, with expansion up to 13.1 million tons per annum in three phases. The Company has signed an imported coal supply agreement with reputable coal suppliers from Indonesia. Currently, the plant is generating electricity through imported coal. The Company generated a topline of PKR 70,080 million during FY25 and a bottom line of PKR 20,707 million during the same period. Comfort is drawn from the experience of the O&M contractor, M/s Harbin Electric International Co., Ltd. - P.R. China (HEI), which has taken over the plant from the previous operator effective from March 2023. Going forward, the Company's main focus would be to keep the plant operational. As of June 30, 2025, the Company had total borrowings of PKR 124,753 million, including short-term borrowings of PKR 17,790 million. The Company has a history of issuing Sukuks to meet its short-term capital requirements. While multiple Sukuks were often issued simultaneously in the past, the Company now typically maintains only one Sukuk outstanding at a time. In continuation of this strategy, it is currently in the process of issuing a PKR 6,000 million Sukuk.
The financial strength and extensive experience in the energy value chain of the sponsoring company, Lucky Cement, remain key positives for the ratings. However, LEPCL continues to navigate working capital pressures arising from the significant devaluation of the PKR, supply chain disruptions, and tariff adjustments. The Company's power offtake agreement with CPPA-G provides revenue stability, as capacity payments are guaranteed under the contract upon plant availability, even in the absence of a purchase order. Furthermore, the Government of Pakistan has provided a payment guarantee against dues from CPPA-G, offering additional credit protection.

About the Entity
LEPCL was incorporated in Pakistan on June 13, 2014, as a public unlisted company at Port Qasim, Karachi, Sindh. Lucky Cement Limited owns 100% shareholding of LEPCL and stands as the flagship company of the Yunus Brothers Group. The Company's Board comprises eight directors, including the Chief Executive Officer, with all board members representing Lucky Cement. Mr. Muhammad Ali Tabba, the Chairman, has been associated with the Group in different capacities for nearly three decades and currently chairs the Board with his visionary leadership and vast experience.

About the Instrument
Lucky Electric Power Company Limited (LEPCL) is in the process of issuing a rated, unsecured, unlisted, privately placed Short-Term Sukuk, PPSTS-23, amounting to PKR 6,000 million, inclusive of a green shoe option of PKR 2,000 million, in March 2026. The Sukuk will have a maturity date of 17 September 2026 and is being issued to meet the Company’s working capital requirements. The instrument will carry a profit rate of 3-Month KIBOR minus 10 basis points, with both profit and principal payable at maturity.