Following is the text of press release issued by
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The ratings of
Business risk is considered low exhibited by demand risk coverage under the Power Purchase Agreement signed between WAPDA and the company. Current borrowings mainly short-term reflects the need to meet the working capital requirements and maintenance projects. Short-term borrowing lines are available and mainly used to fund any shortfall in working capital requirement. Total short term line available to KEL is
Meanwhile, the coverages of the company has also dropped due to increased usage of short term borrowings and its financial profile is highly dependent on the timely repayment of the receivables. The Company has been paying dividends which in times of need is an internal source of liquidity available. The ratings continue to take comfort from
Although well-managed, in-house O and M activities expose the company to operational risk; thus upholding strong operational performance in line with agreed performance levels would remain a key driver of the ratings. Meanwhile, any further significant accumulation in receivables, thereby impacting the financial profile of the company may have negative effects. However, the Govt. is planning to issue a SUKUK of
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