Press Release

VIS Reaffirms Entity Ratings of PGP Consortium Limited

Karachi, November 28, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of PGP Consortium Limited (PGPC) at ‘A-/A-2’ (Single A Minus/A-Two). Ratings continue to be placed on ‘Rating Watch-Developing’ status. The medium to long-term rating of ‘A-’ signifies good credit quality with strong protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Risk factors are considered variable if changes occur in the economy. The previous rating action was announced on November 25, 2021.

The ratings assigned to PGPC take into account company’s ownership profile, unique business model and strategic positioning in the energy sector of the country. PGPC is a wholly owned subsidiary of Pakistan GasPort Limited (PGPL), whose sponsors have vast experience of establishing and operating energy sector projects. Ratings derive strength from the company’s low business risk profile encompassing long-term LNG terminal Operation and Services contract inked with Pakistan LNG Limited (PLL) (formerly Pakistan LNG Terminals Limited (PLTL)) ensuring guaranteed revenues and cash flows. The ratings are dependent upon smooth operations of the business to maintain margins for comfortable debt servicing coverage.

On the profitability front, bottom line improved largely due to exchange gains and absence of compensation for financial support provided by related party. The ratings also take into account implementation of IFRS-16 which requires recognition of all leased assets and corresponding liabilities arising from lease transaction on the books; however, this magnified position does not impact the company’s projected financial position. As per management, the company’s repayment capacity in terms of debt service coverage ratio would remain at a comfortable level over the rating horizon. Meanwhile, improvement in leverage indicators over time due to debt retirement, profit retention and internal capital generation has also been incorporated in the assigned ratings.

Nevertheless, ratings continue to be placed on ‘Rating Watch-Developing’ status on account of PGPC’s arbitration proceedings with PLL in the London Court of International Arbitration on termination notice served to the company; the same rating outlook will continue till the outcome of the dispute matter with PLL is reached. The ratings also take into consideration the continuation clause of Operation and Services Agreement signed between PGPC and PLL that till the final decision is reached both parties will continue servicing their obligations. Based on the view of PGPC’s legal counsel, the management is confident that the decision will be in the company’s favor. Meanwhile, upholding operational performance and timely recovery of substantial receivables from related parties in line with agreed performance levels would remain a key rating driver going forward.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext: 201) at (021) 35311861-66 or email at

Javed Callea

Applicable rating criterion: Corporates (August 2021)

Rating The Issue (July 2020)

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