February 20, 2020 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)

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The ratings reflects the operational parameters and the related data reflect improved performance going forward. The number of consumers have taken a growth of ~9% during FY19 as compared to FY18. The recovery ratio of the company, which reflect, amount received against amount billed, has taken almost 1.6% point improvement during FY19. Hence, the profitability and cashflow position of the company are expected to take a positive impact. The challenge faced by the industry is prevailing circular debt.

As of July, 2019 the Company's gross receivables from various Federal and Provincial public sector entities stand at PKR 196bln and are nearly two times the Company's payables which total PKR 109bln. In this regard, the Company is in continuous engagement with relevant stakeholders for the resolution to the issue of receivables and payables. Further, the Company is of the view that the settlement of receivables and payables related to various Federal and Provincial government entities / departments will be made on net basis and any mark-up will be payable by the Company only when it will reciprocally receive mark-up on outstanding receivables.

While the growing receivables from various government entities and departments has impacted the working capital position of the company and resultantly increased the company's borrowing levels, overall leverage indicators reflect manageable position. The company is creating different avenues to fund it's enhanced needs of its working capital, recent leg of which, K- Electric is issuing Unsecured Privately Placed Islamic Commercial Paper (ICP-6) for a term of 6 months of PKR 4,295mln.

For more information, contact:AnalystThe Pakistan Credit Rating Agency Limited (PACRA)Awami Complex, FB1, Usman Block New Garden Town,Lahore - PakistanTel: +9242 586 9504 -6Fax: +9242 583 0425Email: hammad.rashid@pacra.comWeb: www.pacra.com

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© Pakistan Press International, source Asianet-Pakistan