Press Release
VIS Revises Sukuk and Entity Ratings of Hascol Petroleum Limited
Karachi, March 30, 2020: VIS Credit Rating Company Ltd. (VIS) has assigned a ‘D’ rating (Defaulted Obligation) to the six year privately placed sukuk of Rs. 2bn, issued by Hascol Petroleum Limited (HPL) on account of non-payment of an installment due. The sukuk were issued in 2015 and had so far been serviced without delay (15 out of 20 payments has been made successfully). The Sukuk previously carried a rating of ‘BBB-’ with ‘Negative outlook’.
Sukuk rating was based on the instrument carrying a debt servicing mechanism to progressively retain upcoming installment in an escrow account under a trustee arrangement, which mechanism has apparently faltered.
As per September’20 accounts, HPL’s equity stood at negative Rs. 33.3 billion (excluding revaluation surplus). On account of this, and above mentioned instrument default, the debt repayment capacity of the company has substantially eroded. Accordingly, ratings have been revised to ‘CC/C’ (Double C/Single C) with ‘Negative outlook’ from ‘BB+/A-3’ (BB Plus/A-Three). Long term rating of ‘CC’ signifies high default risk and short term rating of ‘C’ signifies doubtful capacity for timely payment of obligations. Last ratings were announced on April 17, 2020.
For further information on this rating announcement, please contact the undersigned (Ext: 306) or Mr. Arsal Ayub (Ext: 216) at (021)35311861-70. Email for further info at info@vis.com.pk mailto:info@vis.com.pk
Faryal Ahmad Faheem
Deputy CEO
Applicable Rating Criteria:
Oil & Gas Industry (April 2019) https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf
Industrial Corporates (June 2019) https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Meth-OilGas201906.pdf