Press Release

JCR-VIS Assigns Rating to proposed Commercial Paper of Hascol Petroleum Limited

Karachi, December 05, 2017: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned preliminary rating of A-1 (Single A One) to HPL’s first issue of privately placed commercial paper (CP) of up to Rs. 1billion having a tenor of up to 6 months. The CP would be shariah compliant. Rating assigned to the CP would be finalized upon review of signed legal documents.

HPL plans to raise up to Rs. 1billion through two CP issues each of tenor up to 6 months to fund working capital requirement/procurement of oil inventory. Disbursement of 2nd CP issue shall be subject to minimum 2 days clean-up period after the adjustment of the 1st CP issue. The issue entails bullet payment at maturity and has a profit rate of 6 month KIBOR plus 125bps.

HPL has an outstanding entity ratings of ‘AA-/A-1’ (Double A Minus/A-One) by JCR-VIS. The assigned ratings incorporate strengthening in capitalization indicators of HPL with completion of right issuance process. Ratings also reflect increasing market share, significant ongoing and projected investment in infrastructure (storage, retail footprint & supply chain) which will facilitate in sustaining growth momentum and improving corporate governance framework. Ratings also draw comfort from strategic investment of Vitol Dubai Limited in HPL, a significant international player in the oil sector. Cash flow from operations is projected to remain healthy for timely repayment of the CP with debt servicing coverage remaining over 1(x) even after accounting for CP repayments. Key risk to cash flows vis-à-vis projections may emanate from earning loss from lower furnace oil off-take on account of changes in energy mix.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at (021)35311861-70 or fax to (021)35311872-3.

Javed Callea

Applicable Rating Criteria:
Oil & Gas Industry (November 2016)
Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-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. JCR-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. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-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 2017 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited