Pakistan Power: Another day, Another debt settlement, (AKD Daily May 16, 2019)
- As per our channel checks, the Energy Sukuk II of PkR200bn is expected to be issued by end of May’19. We expect ~30% of the amount to be routed towards IPPs, implying 40% settlement of cumulative IPPs’ receivables by Jun’19, as opposed to Dec’18 level.
- For KAPCO, this could translate into resumed payouts in 4QFY19, as P/A to PSO have already halved to PkR24bn as of Mar’19, while deleveraging does not seem to be a priority this time around as opposed to FY13 settlement (75% of cash injection was used to retire short term borrowing).
- For HUBC, the outstanding P/A and short term borrowings are 35% higher than that of KAPCO, while it may receive a similar amount of cash injection, which leaves little room for payouts. Nonetheless, HUBC remains our top pick, courtesy stream of upcoming US$ hedged power projects.
- Amongst Nishat IPPs, we expect NPL and NCPL both to receive PkR3.0bn (EPS impact: PkR8.0 approx.), while we would place our bets on NPL (lower leveraged than NCPL) leaving more space for payouts.
Hub Power Company is a holding company. Through its subsidiaries, Co. is engaged as a power producer in Pakistan that focuses on developing, owning, operating and maintaining power stations. Co. supplies electricity to Water and Power Development Authority and National Transmission and Despatch Company under long term Power Purchase Agreements for its Hub and Narowal plants respectively.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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