Press Release

VIS Reaffirms Entity Ratings of Thal Power (Private) Limited

Lahore, December 22, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Thal Power (Private) Limited (TPPL) at ‘AA/A-1+’ (Double A /A-One Plus). The medium to long term rating of ‘AA’ signifies high credit quality and strong protection factors. Risk is modest but may vary slightly from time to time because of economic changes. Short term rating of ‘A-1+’ signifies highest certainty of timely payments; short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding and safety is just below risk-free Government of Pakistan’s short-term obligations. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 30, 2022.

TPPL is a wholly-owned subsidiary of Thal Limited (THAL); the assigned ratings derive strength from the strong sponsor profile. THAL is a diversified national conglomerate engaged in the manufacturing of engineering products, jute products, paper sacks, and laminated products; it also holds investments in real estate and energy sectors. TPPL was setup by THAL as a special entity for the purpose of routing its investment in ThalNova Power Thar (Private) Limited (ThalNova or the project). THAL owns 26% ordinary shareholding in ThalNova through TPPL. Ratings take into account TPPL’s unique business model, its debt free capital structure and the long-term PPA of its wholly owned subsidiary (ThalNova) with guaranteed capacity payments.

ThalNova a joint venture between TPPL, Nova Powergen Ltd (subsidiary of Novatex Ltd), CMEC ThalNova Power Investments Limited (a subsidiary of China Machinery Engineering Corporation), Hub Power Holdings Limited and Descon Engineering Limited, is a 330 MW coal-fired power plant in Thar, Sindh. The project, listed under the China Pakistan Economic Corridor, is funded by the China Development Bank and Habib Bank Ltd. ThalNova started commercial operations on February 17, 2023. The project maintained high standing on NTDC’s merit order list on account of low fuel cost and sound operational metrics, generating sizable net profit during FY23. Resultantly, TPPL also made substantial income due to its share in ThalNova. During 1QFY24, THAL injected the last tranche of equity into the project through TPPL.

For further information on this rating announcement, please contact Mr. Maimoon Rasheed at 042-35723411-12 (8008) or email at info@vis.com.pk.



Maimoon Rasheed
Director

Applicable Rating Criteria: Industrial Corporates (May 2023)
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .