PACRA Assigns Preliminary Ratings to Lucky Electric Power Company Limited - PPSTS-24 - 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 is expanding its Block-II mine to 11.2 million tons per annum in three phases. The plant is currently operational on a mix of imported and local coal. The COD of SECMC Phase III is anticipated in September 2026, after which the company will transition to 100% local coal, thereby mitigating foreign exchange and international price volatility risks. The Company generated a topline of PKR 78,768 million during FY26 and a bottom line of PKR 22,031 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, 2026, the Company had total borrowings of PKR 112,767 million, including short-term borrowings of PKR 16,535 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 earlier Sukuk PPSTS-23 of 6,000 million is scheduled to be redeemed in September 2026.
The financial strength and energy-sector experience of sponsor Lucky Cement remain key positives for the ratings, though LEPCL continues to navigate working capital pressures from delayed payments by the power purchaser, supply chain considerations, and tariff adjustments. Revenue stability is supported by the CPPA-G offtake agreement, under which capacity payments are guaranteed upon plant availability regardless of purchase orders, further reinforced by the Government of Pakistan's payment guarantee against CPPA-G dues.

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 is in the process of issuing a rated, unsecured, unlisted, privately placed Short-Term Sukuk, PPSTS-24, amounting to PKR 6,000 million in September 2026. The Sukuk will mature after a period of 6 months 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.