Press Release

VIS Assigns Initial Entity Ratings to Thal Power (Private) Limited

Karachi, December 12, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings to Thal Power (Private) Limited (TPPL) at ‘AA/A-1+’ (Double A /A-One Plus). The long-term rating of ‘AA’ signifies high credit quality and strong protection factors. Risk is modest but may vary slightly from time to time because of economic conditions. The short-term rating of ‘A-1+’ signifies highest certainty of timely payment; Short term liquidity, including internal operating factors and /or access to alternative sources of funds, is outstanding and safety is just below risk free Government of Pakistan’s short-term obligations. Outlook on the assigned ratings is ‘Stable’.

The assigned ratings derive strength from the strong sponsor profile of TPPL, which operates as a wholly-owned subsidiary of Thal Limited (THAL). THAL is a diversified national conglomerate engaged in manufacture of engineering products (Karachi), jute products (Muzaffargarh), paper sacks (Hub & Gadoon) and laminated products (Hub); it also holds investments in real estate and energy sectors. TPPL was setup by THAL as a special entity for the purpose of routing its investment in ThalNova Power Thar (Private) Limited (ThalNova).

ThalNova is a joint venture between TPPL, Nova Powergen Ltd (subsidiary of Novatex Ltd), CMEC ThalNova Power Investments Limited (a subsidiary of China Machinery Engineering Corporation) and Hub Power Company Limited to set up a 330 MW mine mouth coal-fired power generation plant located at Thar, Sindh. This power plant will be run on indigenous coal extracted from the mine operated by Sindh Engro Coal Mining Company Limited. The financial close of ThalNova is expected no later than March 31, 2020 and the Commercial Operation on or before March 31, 2021 as per the extended Financial Close deadline approved by Private Power Infrastructure Board.

As at June 30, 2019, TPPL’s outstanding liabilities included Rs. 857.3m due to THAL. This represents an interest free loan received from THAL for purchase of shares of ThalNova. The loan would be converted into share capital based on the progress achieved by ThalNova for its underlying project. Ratings are dependent upon TPPL being wholly-owned by THAL, the unlevered capital structure of TPPL, commitment from TPPL that it will not undertake any debt in future, and the undertaking from THAL that it will be liable for all existing and future liabilities of TPPL.

For further information on this rating announcement, please contact Mr. Muhammad Ibad Desmukh (Ext: 205) or the undersigned (Ext: 201) at (021) 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Industrial Corporates (May 2019)

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 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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited