20000215

Parco rated

AAA, A1+

RECORDER REPORT

KARACHI: The Pakistan Credit Rating Agency (Pacra) has maintained the long-and-short term ratings of Pak Arab Refinery (Parco) at AAA (triple A) and A1+ (A one plus) respectively.

According to the information released by Pacra, the ratings denote, lowest expectation of credit risk emanating from the company's exceptionally strong capacity to service its obligations on a timely basis. The ratings are applicable to the senior unsecured creditors of the company. Parco continues to be the only company in Pakistan, out of over hundred entities, rated by Pacra that has been assigned the highest rating of AAA.

Owing to the stable and efficient business operations, skil ful fund management, and effective and prudent management policies, Parco's business and financial risk continues to remain very low. With massive deployment of funds in the under construction refinery project at Mehmood Kot, near Multan, the company's gearing continues to increase, Pacra said.

However, the financial coverages are not likely to come under any significant pressure because of strong operating cash flows. Parco's financial strength is expected to be augmented further with the completion of its refinery project, which is likely to commence operations towards the end of the current calendar year. The company is assured of a 25 percent government guaranteed minimum return on its investment in the project.