Press Release

VIS Assign Preliminary Ratings to K-Electric Limited’s Short Term Sukuk - 30

Karachi, March 07, 2025: VIS Credit Rating Company Limited (‘VIS’) has assigned preliminary instrument ratings of A1+ (plim) (A One Plus Preliminary) to K-Electric Limited’s (“KEL” or “the Company”) Short Term Sukuk (STS-30). 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+ for the Long-Term/Short-Term.

KEL plans to raise an unsecured, rated, privately placed STS, of up to PKR 7.0 bln inclusive of a green shoe option of PKR 1.0 bln. The proceeds from the issue will be utilized to finance the working capital requirements of the Company. The tenor of the instrument is up to six (06) months from the date of drawdown. The proposed profit rate is 3M KIBOR with a spread of up to 10 basis points (bps) per annum. Profit is payable at the time of the maturity of the Sukuk along with the principal payment.
The 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.

Moreover, KE has advanced its renewable energy initiatives, securing competitive tariff bids for its 100 MW Bela and 50 MW Winder projects, along with a 220 MW hybrid solar-wind project. The company has also completed the process for its 270 MW Sindh Solar Projects and submitted the Auction Evaluation Report. These developments reflect KE’s ongoing efforts to diversify its energy mix and reduce dependence on imported fuels, while also facilitating investor participation in the sector.

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
Rating the Issue
https://docs.vis.com.pk/docs/Rating-the-Issue-Aug-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .