Karachi, March 29, 2022 (PPI-OT):VIS Credit Rating Company Limited (VIS) has reaffirmed the entity rating of Artistic Energy (Pvt.) Limited (AEPL) at ‘A+/A-1’ (Single A Plus/A-One). Long term rating of ‘A+’ indicates good credit quality; adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-1’ reflects high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on March 16, 2021.

AEPL operates a 49.3MW wind power farm in Jhimpir, District Thatta, Sindh which was set up at a total cost of Rs 11.7b. The project was financed in a debt equity ratio of 75:25. AEPL’s assigned ratings incorporate satisfactory operating track record of AEPL, adequate financial profile and low exposure to business risk. AEPL is a wholly owned subsidiary of Artistic Milliners (Pvt.) Limited (AMPL). The assigned ratings incorporates sound financial profile of sponsor.

Business risk profile draws support from long-term Operations and Maintenance (O and M) contract in place with experienced O and M operator and track record of compliance with normative parameters stipulated in Energy Purchase Agreement (EPA) since commencement of operations. Presence of long-term EPA with guaranteed capacity payments mitigates off-take risk while adequate insurance coverages are also in place. While power produced, and in turn cash flows, are susceptible to seasonality and possible variance in wind speed, comfort is drawn from surveys conducted by international consultants confirming adequate wind availability historically.

During H1’FY22, Funds from operations (FFO) was up 39%, vis-à-vis SPLY. Debt Servicing Coverage Ratio (DSCR) and FFO to Total Debt remain sound while projected DSCR is expected to remain comfortable over the rating horizon. Given collection of outstanding receivables from GoP, dividend payout of Rs. 1.7b was made to shareholders in H1’FY22. The assigned rating remains dependent on maintenance of business and financial risk metrics in line with benchmark for the assigned rating.

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/