Karachi, July 09, 2021 (PPI-OT):VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of A-1+ (Single A One Plus) to K-Electric Limited’s (KE) proposed Islamic Commercial Paper (ICP-19) issue of up to Rs. 2.5 billion. The ICP-19 will have bullet repayment at maturity and will have a tenor of 6 months. The proceeds of the issue will be utilized for KE’s working capital requirements.

VIS has assigned entity rating of ‘AA/A-1+’ (Double A/A One Plus) to KE. The assigned ratings recognize the strategic importance of KE, a vertically integrated utility company, that has exclusive distribution rights in its service area i.e. Karachi and adjoining areas of interior Sind and Baluchistan. Business risk profile draws support from growing demand for electricity and continuous improvement across various operational metrics; however, Covid-19 has resulted in various challenges, with additional directives from the Government for power companies, aimed at consumer facilitation.

In FY20, the improving trajectory of T and D losses has been affected while growth in unit sent out was also lower than projected. However, later with economic activity revival post COVID-19 lockdown, units billed in 9MFY2021 increased by 6.2% vis-à-vis corresponding period last year. Going forward, based on the planned initiatives, the company remains resolute in recuperating the operational improvements, wherein some improvement has already been noted, with KE posting a net profit in 9MFY21. Continuity in improvement in various operational performance metrics is considered important from a ratings perspective

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/