PACRA Maintains Entity Ratings of Etihad Alloys (Pvt.) Limited

Etihad Alloys Private Limited (“EAPL” or “the Company”) is an industrial concern situated at District Rahim Yar Khan, Punjab Pakistan. The Company is engaged in constructing owning and operating a Steel melting Plant (Steel Project) with a designed melting capacity of approximately 250,000 MT per annum, a bagasse based captive Powe Plant (Power Project) with designed power generation capacity of 37.2 Mw and a Re-Rolling Mill (Re-Rolling Project) with Capacity of 200,000 MT per Annum. The Steel Melting Plant was planned in April 2021 and as of now it is substantially complete. Financial Close of the Steel Project was achieved in due course through a syndicated term finance facility of PKR 2.785bln, 100% equity and the proceeds of the term finance have been injected in the project. Repayments of the term Finance of Steel Project commenced in March 2023 and the Company has successfully serviced eleven quarterly installments (principal and markup) with sponsor support, demonstrating the sponsors' continued financial commitment. Etihad Power Generation Limited (EPGL), a wholly owned subsidiary of Etihad Alloys owns a 37.2 Mw bagasse based Power Plant situated in District Rahim Yar Khan. EPGL was merged into EAPL effective July 1, 2023, through an order of the Lahore High Court. The merger was undertaken to create operational synergies, optimize resource utilization, and ensure uninterrupted power supply for the upcoming steel operations. Financial close of Power Project was successfully achieved on August 5, 2024, through a syndicated term finance facility of PKR 5.85bln, with drawdowns made as per milestone achievements. As of now sponsors have already injected 100% of the committed equity contribution for the Power Project. Substantial progress has been achieved-major equipment has been procured and delivered to the site, civil works are nearing completion, and mechanical and electrical installations are underway. FABCON Design & Engineering (Pvt.) Limited serves as the major contractor for the balance deliveries of the boiler and allied equipment, bringing specialized experience in bagasse-based energy solutions. The Commercial Operations Date (COD) for EAPL's integrated Steel and Power projects is targeted within FY26. In view of prevailing market conditions, the management has also decided to diversify into the rebar segment through the establishment of a Re-Rolling Mill with an initial capacity of 200,000 tonnes per annum. Financial close for the Re-Rolling Mill is currently in progress, with equity contributions being made in line with project requirements. COD of the Rolling mill Project is targeted by Decmeber 2026. As of FY25, EAPL's total debt stood at PKR 4,914mln, which is expected to increase with ongoing drawdowns for project completion. Additionally, a major milestone in the Company's development was achieved in early 2025 when EAPL was granted Special Economic Zone (SEZ) status. This designation confers a 10-year tax holiday, significantly enhancing the project's financial viability and long-term profitability. The SEZ status is expected to strengthen EAPL's future outlook by improving post-COD cash flows, supporting faster debt repayment, and bolstering overall return metrics through substantial fiscal relief. It also positions the Company to benefit from operational synergies, reduced production costs, and improved profitability driven by in-house power generation and SEZ-related incentives.
The ratings are contingent upon the management’s ability to achieve project completion milestones. The current ratings reflect substantial progress on both the steel and power projects. However, the developing outlook captures the time remaining until their commissioning. Continued sponsor support up to the COD remains critical to the Company’s financial risk profile.

About the Entity
EAPL, a venture of Etihad Group, is a private limited company incorporated in 2021 under the Companies Act of 2017. Etihad Group is recognized as one of Pakistan's leading industrial houses, with diversified operations in sugar manufacturing, construction services, and real estate. The CEO, Mr. Zahid Jamil, is the man at the last mile. He brings with him vast experience, leading various entities across multiple sectors.