Press Release
VIS has Finalized Instrument Ratings to K-Electric Limited’s Short Term Sukuk - 31
Karachi, May 13, 2025: VIS Credit Rating Company Limited (VIS) has received the final legal documents pertaining to K-Electric Limited’s (KEL or the Company) Short-term Sukuk-31 (STS-31) issue and has finalized its instrument ratings at A1+ (A One Plus). The short-term ratings of A1+ indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. The instrument rating is in line with the entity ratings of the Company of AA/A1+. Previous rating action was announced on April 11, 2025.
KEL has issued an unsecured, rated, privately placed STS, amounting to PKR 7.0 bln. The proceeds from the issue will be utilized to finance the working capital requirements of the Company. The instrument was issued on April 16, 2025. The tenor of the instrument is up to six (06) months from the date of drawdown. The profit rate is equal to 3M KIBOR. Profit is payable at the time of the maturity of the Sukuk along with the principal payment.
Ratings reflect KEL’s strategic position in powering Karachi - Pakistan's financial hub and remains committed to ensuring an uninterrupted power supply to the city. However, ratings also take note of the approval of the Generation Tariff, with delay in approvals of the individual tariffs filed for Transmission, Distribution and Supply for the period FY24 to FY30 by NEPRA. The complete approval of the MYT (Multi Year Tariff) depends on the approval of all individual tariffs and accordingly, the finalization of Financial Statements post FY23 is dependent on the same as also disclosed by KEL on PSX. As per management, KEL is actively engaged with NEPRA to expedite the regulatory proceedings for the approval of the tariff.
According to the management, the Company’s cash flow position and debt profile have remained stable and are expected to be maintained in the future. Following the finalization of the MYT in alignment with KEL’s future investment plans, an increase in debt levels is anticipated. Moreover, management has indicated that all debt obligations are being met on schedule and will continue to be serviced in a timely manner.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Instrument Rating Methodology:
https://backupsqlvis.s3.us-west-2.amazonaws.com/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf