VIS Credit Rating Assigns PR Of Single A-1 Plus To KE's ICP-10

VIS Credit Rating Company Limited has assigned preliminary rating of single A One plus to K-Electric Limited's proposed Islamic Commercial Paper (ICP-10) issue of up to Rs 4.5 billion

KARACHI, (UrduPoint / Pakistan Point News - 25th Aug, 2020 ):VIS Credit Rating Company Limited has assigned preliminary rating of single A One plus to K-Electric Limited's proposed Islamic Commercial Paper (ICP-10) issue of up to Rs 4.5 billion.

The ICP-10 will have bullet repayment at maturity and will have a tenor of 6 months. The proceeds of the issue will be utilized for KE's working capital requirements, said release on Tuesday.

VIS has assigned entity rating of double A/A One plus to KE. The assigned ratings recognize the strategic importance of KE, a vertically integrated utility company, that has exclusive distribution rights in its service area i.e. Karachi and adjoining areas of interior Sindh and Balochistan.

Business risk profile draws support from growing demand for electricity and continuous improvement across various operational metrics; however, Covid-19 has resulted in various challenges and has impacted improving trajectory of T&D losses while growth in unit sent out was also lower than projected. Going forward, based on the planned initiatives, the company remains resolute in recuperating the operational improvements, which will resultantly have a positive impact on the company's financials.

Continuity in improvement in various operational performance metrics is considered important from a ratings perspective.