Pakistan Credit Rating Agency Limited assigns final rating to proposed PPTFC of Pak Libya holding company

Lahore, January 27, 2015 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has assigned a final rating of “AA” (Double A) [Preliminary: AA] to the proposed, and secured PPTFC of PKR 1,000mln by Pak Libya Holding Company (Private) Limited (PLHC). The rating denotes a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. However, the rating carries “Negative Outlook”.

The rating reflects the joint ownership of PLHC by the Governments of Pakistan and Libya. On a standalone basis, the company has managed to ease out pressure on its overall performance. The management is making continuous efforts to achieve the targets envisaged in its detailed business plan. However, the efficacy of the plan in a highly competitive operating environment remains to be seen.

Furthermore, the company is strengthening its management structure and control environment, which are expected to benefit its prospects. PLHC is aggressively pursuing for recovery of its exposure in Kamoki Energy Limited (KEL) through winding up process. Nevertheless, this exposure, with the exception of limited forced sale value benefit, has been provided.

The company is short on minimum capital requirement (shortfall of ~PKR 2.6bln as at end-Sep14) for which the shareholders are yet to form a conclusive equity injection plan. Hence, the rating carries negative outlook. Going forward, the management’s ability to successfully implement its strategy, while managing the associated risks, would remain critical. Meanwhile, development of sustainable profitability is important.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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