Press Release

JCR-VIS assigns rating to proposed Islamic Commercial Paper of K-Electric Limited

Karachi, July 03, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary short-term rating of A-1 (Single A One) to K-Electric Limited’s (KE) proposed Islamic Commercial Paper (ICP) of up to Rs. 7billion (Including a green shoe option of up to Rs. 2b). The ICP will have bullet repayment at maturity and will be issued in two separate tenors for 6 and 9 months. The proceeds of the issue will be utilized for KE’s working capital requirements.

JCR-VIS has assigned entity rating of ‘AA/A1’ (Double A/A One) to KE. Ratings have been placed on ‘Rating Watch-Developing’ status. The assigned ratings recognize the strategic importance of KE, a vertically integrated utility company, that has exclusive distribution rights in its service area i.e. Karachi and adjoining areas of interior Sind and Baluchistan. Business risk profile draws support from continuous improvement across various operational metrics including reduction in transmission & distribution losses from 22.2% in 2016 to 20.1% in the financial year 2018 (July’2017 to May’2018). Assessment of financial risk profile draws support from growing demand for electricity (units sent out has grown at a CAGR of approx. 3% over the last 3 reported years). Moreover, the Company has informed that it has timely serviced all its obligations with significant decline in outstanding borrowings to Rs. 46.3b (FY16: Rs. 55.4b; FY15: Rs. 70.2b) at end-Dec’2017.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or Mr. Talha Iqbal (Ext: 213) at 92-21-35311861-70 or fax to 92-21-35311873.

Atiq Anwar Mahmudi

Applicable Rating Criteria: Applicable Rating Criteria: Industrial Corporates (May 2016)

Rating The Issue (September 2014)

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 2018 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