Press Release

VIS Credit Rating Company Upgrades Entity Ratings of Artistic Wind Power (Pvt.) Limited

Karachi, April 08, 2022: VIS Credit Rating Company Limited (VIS) has upgraded entity ratings of Artistic Wind Power (Pvt.) Limited (AWPPL) from ‘A-/A-2’ (Single A Minus/A-Two) to ‘A/A-2’ (Single A/A-Two). Long term rating of ‘A’ indicates good credit quality; adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-2’ denotes good certainty of timely payment; sound liquidity factors and company fundamentals. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on March 16, 2021.

AWPPL is a 50MW wind power plant situated in Jhimpir, District Thatta, Sindh. It is a wholly owned subsidiary of Artistic Milliners (Pvt.) Limited (AMPL). The assigned ratings incorporate sound financial profile of sponsor. The total cost of the Project, estimated at $66.2m, has been financed through a debt to equity ratio of 80:20 where debt component comprises an equal (50:50) mix of local and foreign lenders. The financial close for the project was achieved in November 2019. The revision in assigned ratings of AWPPL incorporates accomplishment of commercial operations on February 16, 2022, as a result of which the project does not feature any further construction risk.
Business risk profile draws support from long-term Operations & Maintenance (O&M) contract in place with experienced O&M operator. Presence of long term Energy Purchase Agreement (EPA) with guaranteed capacity payments mitigates off-take risk while relevant insurance coverages are also in place. Although power produced and in turn cash flows are susceptible to seasonality and possible variance in wind speed, comfort is drawn from surveys conducted by international consultants confirming adequate wind availability historically.
Equity base of the AWPPL has improved over the years on account of equity injection by the sponsors. During the period under review (FY21 and H1’FY22), sponsors injected equity to the tune of Rs. 1.5b, however due to debt drawdown, gearing increased. Leverage indicators are expected to improve over time owing to debt repayments and internal capital generation.
For further information on this rating announcement, please contact Mr. Arsal Ayub, CFA or the undersigned (Ext. 207) at 021-35311861-70 or email at .

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (August 2021)

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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited