Pakistan Credit Rating Agency maintains Ratings of Karachi Electric Supply Company Limited

Lahore, March 28, 2013 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained long term and short term entity ratings of Karachi Electric Supply Company Limited (KESC) at “A-” (Single A minus) and “A2″ (A Two), respectively.The ratings denote a low expectation of credit risk emanating from a string capacity for timely payment of financial commitments.

The ratings reflect the strategic importance of KESC – the sole power supplier to Pakistan’s key financial and industrial centre, Karachi.Lately, significant improvement in profitability has been witnessed owing to commissioning of energy efficient gas-based power plant, improvement in T and D losses and recovery ratio.

Improvement in core cashflows has eased KESC’s financial profile to some extent, but it is still characterized by relatively weak coverages and stressed working capital. KESC’s tariff structure is designed to pass on efficiency benefits to the company; wherein room for improvement is available. The management has devised a strategy to gradually cultivate these benefits. Demonstrated commitment of main sponsors – Abraaj Capital and GoP – is a key rating consideration.

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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