PACRA rates FFC Energy at A/A1

(SeeNews) – Sep 16, 2011 - The Pakistan Credit Rating Agency (PACRA) said Thursday it had set A long-term and A1 short-term ratings to local FFC Energy Ltd, which is setting up a 49.5 MW wind power plant.

The ratings, which imply "strong" debt servicing capacity, favourably factor in the strong financial profile of the company's parent, fertiliser specialist Fauji Fertilizer Company Ltd (KAR:FAUF), and the reputation of German engineering, procurement and construction (EPC) contractor Nordex (ETR:NDX1).

On a negative note, the ratings are constrained by risks in the set-up stage, including the impact of the weak law and order situation and stressed infrastructure on the access to resources.

According to the rater, once commissioned, the project should provide steady cash flows. Yet, PACRA cited worries over the weak financial discipline of the sole power purchaser.

The key rating sensitivities are the management's ability to deal with the construction and operating risks and the timely commissioning of the project.

Rating agency website: www.pacra.com

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