The Engro Powergen Thar Private Ltd. (EPTL) has asked the Central Power Purchasing Agency Guarantee Limited (CPPA-G) to immediately settle its outstanding dues of Rs65 billion to save EPTL from default on upcoming debt obligation.
“We are facing a severe liquidity crisis, imperiling our ability to meet imminent obligations to lenders and suppliers (including fuel supplier),” EPTL said in a letter to CPPA.
Upcoming debt obligation: EPTL asks CPPA-G to pay at least Rs32bn by month-end
At the start of April, EPTL vide letter (ref. EPTL-2642-04/2024) informed CPPA-G about the upcoming debt servicing obligations of EPTL and SECMC (Thar Coal supplier) which were becoming due in May-end.
“And requested payment of at least Rs42 billion to manage the debt servicing obligations as well as operational requirements, considering the fact that EPTL is a top-3 Merit Order plant operating at high load factors during peak summers and being a key constituent of thermal base load throughout the year,” the letter stated.
Yet, as of May 24th the EPTL has received only Rs17 billion against its request of total disbursement of Rs350 billion to power producers during this time, according to the letter.
“This is not even sufficient to fulfil the debt requirements of EPTL and SECMC. This situation represents an unprecedented crisis for us, with our urgent plea to avert potential debt default being not given due importance.”
It is pertinent to mention here that EPTL is in a precarious situation with outstanding dues from CPPA-G having surged to Rs76 billion, with Rs65 billion overdue while one year ago (May 31, 2023) the EPTL’s overdue receivables were Rs39.5 billion.
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“This staggering increase in overdue receivables has resulted in EPTL’s recovery percentage dropping to 86% compared to 89% to 90% that has been historically maintained for CPEC projects by CPPA-G (Our YTD recovery percentage for 2024 is a mere 75%),” the letter stated.
The company asked the CPPA-G for immediate attention to expedite the clearance of EPTL’s overdue receivables and ensure the immediate payment of at least an additional Rs15 billion to EPTL by May 29th to ensure successful debt servicing.
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