Press Release

VIS Maintains Entity Ratings of PGP Consortium Limited

Karachi, July 04, 2023: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of PGP Consortium Limited (‘PGPC’ or ‘the Company’) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned ratings has been revised from ‘Rating Watch – Developing’ to ‘Positive’. The medium to long-term rating of ‘A-’ signifies good credit quality with adequate 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. Access to capital markets is good. Risk factors are small. The previous rating action was announced on November 28, 2022.
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 Agreement (OSA) 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.

Ratings were placed on ‘Rating Watch-Developing’ status on account of PGPC’s arbitration proceedings with PLL in the London Court of International Arbitration (LCIA) on termination notice served to the company. In April 2023, LCIA concluded the arbitration process in favor of the Company which resulted in PLL withdrawing termination notices and all other options exercise notices. Consequently, the outlook has been revised to ‘Positive’. Meanwhile, upholding operational performance in line with agreed performance levels and timely recovery of substantial receivables from related parties would remain a key rating driver going forward.

For further information on this rating announcement, please contact Mr. Saeb Jafri (Ext: 202) or the undersigned (Ext: 201) at (021) 35311861-64 or email

Javed Callea

Applicable rating criterion: Corporates (May 2023)

Rating The Issue (November 2021)

VIS Rating Scale:

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