PACRA Maintains Rating of Liberty Power Tech Limited

Lahore, October 08, 2020 (PPI-OT): Liberty Power Limited (Liberty Power Tech) runs a 200MW power plant based on Residual Fuel Oil. The Company operates in the regulated power sector. It enjoys sovereign guarantee against receivables from power purchaser CPPA-G given adherence to agreed performance benchmarks. The Company’s operations and maintenance operator, Wartsila Pakistan (WPK), is a key source of comfort in managing the plant’s operations. Fuel supply risk is adequately covered as they procure from different suppliers with good credit terms; being managed since 2011. Liberty Power Tech continues to meet its availability (90%) and efficiency (45%) benchmarks.

The Company’s financial risk profile is dependent on the timely receipt of receivables from the power purchaser. Nevertheless, strong internal cash generation and available working capital lines have helped it in managing its working capital requirements. As at end March-20 available working capital lines stood at PKR 14,245mln out of which PKR 12,696mln are utilized (~89%).

Because of the mounting receivables and consequent funding thereof from banking lines, remaining cushion in the available working capital facilities is limited, warranting management’s immediate attention; meanwhile, recovery in overdue receivables from the Energy Sukuk of PKR200bln is observed and settlement of pending receivables is considered crucial. As at end March-20 the company has outstanding principal for Sukuk and Islamic finance facility of PKR 2,787mln respectively. The ratings draw comfort from the sponsors’ demonstrated support to the Company.

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