Press Release

JCR-VIS maintains Ratings of PGP Consortium Limited

Karachi, April 16, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained entity ratings of PGP Consortium Limited (PGPC) at “A-/A-2” (Single A Minus/A-Two). Rating of preference shares issue of PGPC has been maintained at ‘BBB’ (Triple B). Outlook on the assigned ratings has been revised from ‘Stable’ to ‘Positive’. Subsequent to change in the funding plan, JCR-VIS has withdrawn preliminary rating of ‘A’ (Single A) assigned to the proposed sukuk issue. The previous rating action was announced on October 07, 2016.

PGPC is the second and the largest LNG import and regasification terminal in Pakistan utilizing a Floating Storage and Regasification Unit (FSRU) constructed by Samsung in Korea and is selling 600 mmcfd of its regasification capacity, out of 750 mmcfd installed, to Pakistan LNG Terminals Limited (PLTL), under the 15-year LNG Operation and Services Agreement (OSA) signed on July 1, 2016, which in turn bears the responsibility of importing LNG and making it available at the FSRU. With a name plate capacity of 750 mmcfd, PGPC provides storage and regasification services at 96% annual availability factor against a levelized tariff of USD 0.4177 per mmbtu. We understand the name plate capacity of 750 mmcfd has been achieved in the commissioning test and the management is in negotiation with potential customers for sale of additional capacity of 150 mmcfd available with the project, this would add to the revenues of the project.

The Project achieved Commercial Start Date (CSD) upon successful completion of Acceptance Tests with effect from January 04, 2018 as per PLTL Acceptance Certificate. Three regular billings cycles after CSD have been completed. Dispute regarding LDs for delay in commercial operation, and delay in provision of SBLC by PLTL to PGPC covering 3-months capacity payments has been considered by the authorised representatives of the parties and is pending PLTL Board approval, at USD 1 million to be paid over 15 years.

Actual cost of the project has exceeded the projected cost mainly on account of increase in FSRU import duties, exchange rate fluctuation and increase in cash margin requirement for performance bonds and guarantees. These cost overruns, which we believe would not materially alter the project viability, are planned to be met through balances available in existing debt, some new debt, issue of preference shares capital and also through profits generated by the company in first quarter, to maintain proposed debt-to-equity ratio of 60:40.

For further information on this rating announcement, please contact the undersigned at 92-21-35311861 or fax at 92-21-35311872 or Mr. Maimoon Rasheed at 92-42-35723411-13.

Javed Callea

Applicable Rating Criteria: Industrial Corporate (May 2016)
Notching the issue (June 2016)

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 not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2018 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited