PACRA Maintains the Rating of Gas & Oil Pakistan Limited | PP Sukuk

Gas & Oil Pakistan Limited (“GO” or “the Company”) benefits from a strong strategic partnership with Aramco, which holds an equity stake of around 40%. Aramco, a globally significant energy and chemicals player, is reshaping both Pakistan’s OMC landscape and GO’s positioning within it. The sponsors are financially sound and bring deep expertise across the energy supply chain. Governance has been reinforced through the induction of Aramco’s representatives on the Board (BoD) and in key management roles. Going forward, entry into the lubricants segment through Valvoline is expected to further strengthen GO’s business profile. Operationally, GO runs an extensive retail network of about 1,329 outlets, including 75 COCO sites, many of which have been successfully rebranded under the Aramco name. The Company also holds the second-largest storage capacity in the sector at ~205,038 MTs and earns additional income through hospitality services. Its operations span the procurement of petroleum, oil, and lubricants (POL) from local and international markets, alongside storage, distribution, and marketing. Ranked among the top-tier OMCs in terms of volumetric sales and retail footprint, GO has managed to stabilize its business and financial risk profile. Financially, the Company’s topline has grown exponentially (6MCY25: ~225%, CY24: ~36.1%), with improving profitability, and this growth trajectory is expected to persist. Marketing initiatives are being managed effectively, supporting expectations of sustained and stable cash flows. An equity injection from Aramco via a rights issue has further strengthened the capital structure. The Company issued PP Sukuk to part-finance capital expenditure requirements for expanding the retail fuel distribution network through the construction of retail outlets across Pakistan. Working capital management has improved through sizable supply credit provided by Aramco, reducing GO’s dependence on bank borrowings. Resultantly, debt service coverages remain strong, providing an adequate financial cushion.
The ratings are dependent on keeping the growth trajectory, as a consequence of the above-mentioned association with Aramco, including the materialization of other governance and control-related matters.

About the Entity
Gas & Oil Pakistan Limited ('GO' or 'the Company') was incorporated as a public unlisted company in 2012 under the repealed Companies Act 2017. The Company obtained the license to operate as an OMC across Pakistan from OGRA in 2019. GO is engaged in POL procurement from the local and international markets and the storage, distribution, and marketing of petroleum products and lubricants. The Company holds a market share of ~13%. Aramco holds ~40% stake in the Company, while ~60% stake resides with GO. The Company has a ten-member Board; four members represent Aramco, and the other six are nominated by GO. Mr. Tariq Kirmani chairs the Board, while Mr. Khalid Riaz heads the Company as the CEO. To enhance transparency, a few prominent management positions are appointed by Aramco. Other members of the Board and the management are also seasoned professionals.

About the Instrument
In Dec-21, GO issued a rated, secured, privately placed sukuk with a total value of PKR 2.5bln. The sukuk offers a rate of 3-Month KIBOR + 1.75% per annum and has a five-year tenor. Redemption of the sukuk will occur in sixteen equal quarterly installments. To ensure the upcoming coupon payments, the Debt Payment Account (DPA) is funded 100% from a designated account 30 days before each coupon payment date. The Company has recently made markup payments of PKR 33.2mln on 30-Jun-25, and PKR 28.8mln on 30-Sep-25. Additionally, two principal installments of ~PKR 156.2mln each were paid on 30-Jun-25 and 30-Sep-25, respectively.