The Pakistan Credit Rating Agency (Pacra) has maintained the long-term and short-term entity ratings of Pakistan State Oil (PSO) at "AA+" (double A plus) and "A1+" (A one plus), respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The ratings reflect the strong ownership structure of the company, with controlling interest in the government of Pakistan, and high propensity of state support in distressed situations, considering the strategic nature of the company. With its leading status in the OMC sector, PSO retains pivotal position in the energy supply chain of the country, supplemented by an extensive distribution network, largest storage capacity, and adequate support structure.
Meanwhile, ratings take cognisance of increasing short-term leverage emanating from persisting circular debt issue in the energy sector, which has also increased PSO's reliance on imports against local procurement. Nevertheless, comfort may be taken from PSO's stable cash flows and GoP's demonstrated commitment to keep the company afloat.-PR
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