LAHORE: The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the entity ratings of Etihad Alloys (Pvt.) Limited (EAPL), highlighting the company's significant progress in completing its integrated steel complex. The development marks a critical phase for EAPL as it advances toward the final pre-commercial stages of its Steel and Power Projects, with a targeted Commercial Operations Date (COD) at the end of October 2026.
According to The Pakistan Credit Rating Agency Limited, the financing for these projects was secured through syndicated facilities amounting to PKR 11,735 million, with sponsor equity contributions aligned as per agreements with lenders. Despite not yet commencing full operations, EAPL has maintained a strong debt servicing record, supported by sponsor backing, having already fulfilled multiple quarterly installments for both the Steel and Power Projects.
The company is in the final stages of commissioning activities for its projects, with a revised timeline due to extended inspections of imported turbine components. The melting operations will begin with one of three furnaces to ensure product quality and workforce readiness, with plans to expand operations subsequently. The Steel Re-Rolling Project is also nearing completion, expected to commence in early December 2026, as EAPL moves from merchant billets to producing higher-value rebar, aided by established procurement channels for raw materials.
The strategic integration of EAPL’s operations is expected to bolster its competitive positioning. The captive power plant, utilizing bagasse from the group's sugar mill, will shield the company from variable grid tariffs, a significant factor in the sector's margins. Furthermore, the location in central Punjab offers logistical advantages for market access, while the Special Economic Zone status provides tax benefits, enhancing cash flows and supporting debt reduction post-COD.
The rating upgrade reflects reduced execution risks as EAPL approaches commissioning, with crucial financing and material arrangements in place and a consistent record of debt servicing. However, the company’s financial stability remains contingent on sponsor support until it achieves operational cash flow stabilization, given the competitive pressures and tariff adjustments in the sector.