Lahore: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of 'A-1+' to the proposed Short-Term Sukuk (STS-27) of K-Electric Limited (KE). The rating indicates the highest certainty of timely payment, reflecting KE's excellent short-term liquidity and operational stability. The STS-27, a rated, unsecured, and privately placed instrument, aims to raise up to Rs. 5 billion with a maturity period of up to six months, intended for the company's working capital needs.
According to VIS Credit Rating Company Limited, the 'A-1+' rating takes into account K-Electric's strategic importance as a vertically integrated utility with distribution rights in Karachi and adjoining areas of Sindh and Baluchistan. Despite ongoing regulatory approvals for the Multi-Year Tariff, which remain pending, KE has maintained transparent communication with apex regulators SECP and NEPRA. The company's strong regulatory engagement is further evidenced by the recent renewal of its Distribution and Supply Licenses for the next 20 years and the approval of a significant Rs. 392 billion investment plan.
The sukuk issuance is part of KE's broader strategy to bolster financial flexibility amid challenging economic conditions marked by socio-political instability and a rising policy rate. This approach has enabled KE to sustain its operational capabilities and meet its sukuk obligations effectively, as demonstrated by the successful redemption of 21 out of 26 previously issued instruments. The continuous issuance of these instruments since February 2022 underscores K-Electric's robust financial management and commitment to meeting its short-term financial obligations.