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Pakistan Credit Rating Agency Limited maintains ratings of Foundation Power Company Daharki Limited

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by March 25, 2016 General

Lahore, March 25, 2016 (PPI-OT):The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Foundation Power Company Daharki Limited (FPCDL) at “A+” (Single A Plus) and “A1” (A One) respectively. The ratings denote a low expectation of credit risk.

The ratings reflect strong business profile of FPCDL emanating from the demand risk coverage under Power Purchase Agreement signed between NTDC and the company. The implementation agreement further provides sovereign guarantee for cashflows, given adherence to agreed performance benchmarks. The ratings incorporate low operational risk, a result of the performance of KEPCO – the O and M operator.

Fuel of the plant is ‘low BTU’ gas, which is supplied by an associate – Mari Petroleum Company Limited (40% owned by Fauji Foundation). Thus fuel supply risk is considered low. The company manages its working capital requirements by stretching payables to the fuel supplier. Short-term borrowing lines are maintained to fund any short-fall in debt servicing and/or dividend payments. The company’s association with Fauji Foundation (FF) provides comfort to the ratings.

The ratings of FPCDL are dependent on its ability to continue adhering to agreed performance benchmarks. Meanwhile, improvement in managing commercial obligations and sustainability of timely debt repayments may positively impact the ratings.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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