Lahore, March 24, 2023 (PPI-OT): The ratings take comfort from the fact that this project is a priority project under CPEC and has significant economic and strategic importance. Presence of a dedicated jetty at the plant site and the Coal Supply Agreement (CSA) with reputable international coal suppliers which ensure the stable performance of the project provides more cushion to the ratings.
Going forward, due to the increase in the international prices of coal the Company is currently in discussion with the GOP for alternate solutions. O and M agreement is with Hub Power Services Ltd. (HPSL) – a joint venture between Hub Power Holdings Limited and China Power International Maintenance Engineering Company Limited.
The Company has announced the Project Completion Date (PCD) on 23rd Feb 2023. CPHGC has also finalized the tariff with NEPRA recently. The Company reported a turnover of PKR 190.6bln during the CY22 (CY21: 100bln) and has attained a bottom line of PKR 46.5bln in CY22 (CY21: 19bln). DSRA is maintained by the company and is funded by internal cash generation.
The company has paid off six instalments of the long-term project-related debt. In reference to short-term borrowings, CPHGC has procured working capital lines of PKR 66.7bln out of which short-term borrowing utilization stood at PKR 44.4bln during CY22.
In order to cater the short-term working capital needs the Company is also in the process of issuance of PPSTS-3 amounting PKR 7bln. Nevertheless, the leverage is still significant and will progressively decrease over the course of the project. Circular debt build-up could make managing cash flow difficult. The management, however, is steadfast in its commitment to maintaining on-time debt repayments and is supported by pertinent business fundamentals.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com