PACRA Maintains Entity Ratings of Saif Power Limited

Lahore, April 03, 2019 (PPI-OT): Saif Power Limited (Saif Power) runs 225MW Combined Cycle Thermal Power Plant at Sahiwal. The ratings reflect the strong business profile of Saif Power emanating from the demand risk covered under PPA signed between NTDC and the company. The implementation agreement further provides a sovereign guarantee for cashflows, given adherence to agreed performance benchmarks. The ratings incorporate low operational risk, a result of established performance credentials of GE – the O and M operator.

The company produced ~99% of the electricity through gas during CY18. Saif Power’s receivables continue to remain dependent on power purchaser – NTDC – payment behaviour. Howbeit, delayed payments from the power purchaser remained a challenge. Nevertheless, the company has been managing its working capital requirements through a mix of internal cash generation and short-term borrowings. Short term borrowing lines are available and mainly used to fund any shortfall in working capital requirements. Wherein remaining cushion in the available working capital facilities is ~52%. Saif Power is paying dividend to its shareholders and intends to continue this pattern in the future. The company’s association with Saif Group provides comfort to the ratings.

Upholding operational performance in line with agreed performance levels would remain a key rating driver. The Company’s repayment behaviour with its financial profile remains important. Meanwhile, any significant increase in overdue receivables may impact the ratings.

For more information, contact:
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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