KAPCO_Master agreement initialed; LD to be settled over 16 months, (AKD, Off the Analyst's Desk, Feb 01, 2021)
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AKD Research - Off the Analyst's Desk |
Feb 01, 2021 |
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KAPCO: Master agreement initialed; LD to be settled over 16 months |
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Master agreement initialed: As per company announcement on PSX, the Kot Addu Power Company Ltd (KAPCO) has initialed Master agreement and an amendment to power purchase agreement in furtherance to MoU signed in Aug'20. Key features include: · Existing capacity payments and variable O&M shall be reduced by 11% · USD exchange rate and US CPI indexations shall be discontinued for 50% of the reduced capacity payments (locked at exchange rate of PkR168.6/USD) · The payment of outstanding receivables shall be in two tranches of 40% and 60% respectively · If the power purchaser makes default in payment, the discounts given (refer to first bullet point) will be suspended Update on liquidated damages: · With regards to the disputed amount of PkR27bn (force majeure event for 2009 to 2016), the existing term of PPA will be extended by 16 months to Oct'22. · During these 16 months, the company would receive energy payments for the energy delivered but will offset capacity payments for availability against the capacity payments already received during the outage period. Impact on cashflows: · KAPCO's receivables stand at PkR64bn or PkR73/sh, after netting off all liabilities, with ~PKR8.75/sh expected to be received in cash in Feb'21 and ~PkR13.10/sh in Aug'21. This indicates a potential payout ability of PkR21.85/sh in next 12 months. Even if KAPCO pays out 50% of the aforementioned amount, it still translates into a D/Y of 26% at last close. |
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Kot Addu Power Co Ltd. Kot Addu Power Company Limited is a Pakistan-based power generation company. The Company's principal activities are to own, operate and maintain a multi-fuel fired power station with approximately 15 generating units with a nameplate capacity of 1,600 megawatts (MW) in Kot Addu, District Muzaffargarh, Punjab, Pakistan. The Company also sells the electricity produced therefrom to a single customer, the Pakistan water and power development authority. The power plant is a multi-fuel gas-turbine power plant using three fuels to generate electricity: gas, light sulfur furnace oil and high speed diesel. The plant's combined cycle technology enables it to use the waste heat from the gas turbine exhaust to produce steam in the heat recovery steam generator, which in turn is used to run the steam turbines.
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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