PACRA Assigns Initial Rating to Lucky Electric Power Company Limited - PPSTS-22 - PKR 6bln - Aug25

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-22 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 the coal from its developing Block-II (Phase III), which will start in June 26. The previous tentative month was Dec-25. The Company has also signed an import coal supply agreement with reputable coal suppliers. Currently, the plant is generating electricity through imported coal. The Company has generated a topline of ~PKR 53.4bln during 9MFY25. Lucky Electric Power Company Limited generated a bottom line of ~PKR 15.7bln during the same period. Comfort is drawn from the experience of O&M contractor, M/s Harbin Electric International Co., Ltd. -P.R. China (HEI), which has taken over the plant from the previous operator from Mar-23. Going forward, the Company’s main focus would be to keep the plant operational. In 9MFY25, the Company has total borrowings of PKR 131.9bln, including short-term borrowing of PKR 25.4bln. The Company has only 6bln of short-term debt instruments in March 2025, as compared to 25bln in June 24. PPSTS-22 is issued in replacement of PPSTS-21, which matured on 18-Aug-25.
The financial strength and experience in the energy chain of the sponsoring company, Lucky Cement, are considered positive for the ratings. However, considering the unusual increase in working capital requirements due to the significant devaluation of PKR, supply chain issues, and tariff adjustments, LEPCL is striving to manage its needs. The offtake agreement is with CPPA-G, which will, upon the plant’s availability as per the contract, provide capacity payments even if no purchase order is placed. The Government of Pakistan has given a payment guarantee against dues from CPPA-G.

About the Entity
LEPCL, 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. Lucky Cement Limited stands as the flagship company of Yunus Brothers Group. The Company’s board comprises seven directors, including the CEO; all the board members represent Lucky Cement. Mr. Muhammad Ali Tabba, the Chairman, has been associated with the Group in different capacities for nearly three decades and is currently chairing the Board with his visionary leadership.

About the Instrument
LEPCL has issued a rated, unsecured, unlisted, privately placed, short-term Sukuk Lucky Electric Power Company Limited | PPSTS-22 | PKR 6bln | Aug25 (“PPSTS-22”) of PKR 6,000mln (inclusive of green option of PKR 2,000mln) on 18th August 2025. PPSTS-22 has been issued in the rollover of previous Sukuk, PPSTS-21, amounting to PKR 6,000mln, which matured on 18th August 2025. The tenor of the instrument will be 6 months. The purpose of the instrument is to be utilized by the Company to meet its working capital requirements. PPSTS-22 carries a profit rate of 3MK - 0.15%. Profit and principal will be realized at the time of maturity.