KARACHI:VIS Credit Rating Company Limited has reaffirmed entity ratings of single A/A-2 assigned to Ghotki-Kandhkot Road and Bridge (Private) Limited,
The long -term rating of ‘A’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ indicates good certainty of timely payment, said release here on Tuesday.
Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. VIS has assigned preliminary bank loan rating of double A (blr) to GRBL’s secured bank loan facility planned to be drawn for the construction works on the project. Outlook on the assigned ratings is stable. Previous rating action was announced on Oct, 23, 2020.
GRBL has been established to develop two sections of the road located at GhotkiKandhkot site of the Sindh province. This Project will connect N-5 and N-55 between Ghotki on one side and Kandhkot on the other side of River Indus and end on existing by-pass of Indus Highway, N-55. Post construction of this road, distance travelled by the commuters would be reduced by two third in comparison to the alternate route, while time travelled would also be reduced by two hours.
The project will be established under the Public Private Partnership (PPP) regime on Design, Finance, Build, Operate and Transfer basis. GRBC has entered into Concession Agreement with Sindh Government for a period of 28 years. Out of this period, the construction period is up to three-years and operations and maintenance period is up to twenty-five years.
Total project cost is Rs 14.3 billion funded through 70 percent debt and 30 percent equity. Financial close has not been achieved yet, and as per the concessionaire agreement, inability to complete the financial close within 150 days of signing the agreement results in the onus of arrangement of debt funding on Government of Sindh.
A revised term sheet has been signed and financial close is expected to be closed by 3QFY22. However, equity funds have been mobilized to ensure timely completion of project expected to be achieved by July 2023.