Press Release

VIS Assigns Initial Entity Ratings to Nova Powergen Limited

Karachi, July 10, 2020: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings to Nova Powergen Limited (NPL) 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 NPL, which operates as a wholly-owned subsidiary of Novatex Limited (Novatex). Novatex is principally engaged in manufacturing and sale of PET Resin and other types of Resin, PET Preform and BOPET films. The company is one of the leading exporters in Pakistan and also has dominant market share in the local market in all three segments in which it operates. NPL was setup by Novatex as a special entity for the purpose of routing its investment in ThalNova Power Thar (Private) Limited (ThalNova).

ThalNova is a joint venture between Nova Powergen Ltd, Thal Power (Private) Limited (wholly owned subsidiary of Thal Limited), Hub Power Holdings Limited (HUBCO), Descon Engineering Limited and CMEC 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 is Q3 of 2020 and the Commercial Operation in Q1 of 2022.

As at June 30, 2019, NPL’s outstanding liabilities of NPL amounted to Rs. 478m, which were solely due to the sponsor. This amount represents an interest free loan received from Novatex for purchase of shares of ThalNova. The loan is likely to be converted into share capital based on the progress achieved by ThalNova for its underlying project. Ratings are dependent upon NPL being wholly-owned by Novatex, the unlevered capital structure of NPL, commitment from NPL that it will not undertake any debt in future, and the undertaking from Novatex that it will be liable for all existing and future liabilities of NPL.

For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext: 306) at (021) 35311861-66 or email at

Faryal Ahmad Faheem
Deputy CEO

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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited