EPTL on verge of default as Rs65bn receivables remain elusive

KARACHI: Engro Powergen Thar Private Ltd (EPTL) has urged the Central Power Purchasing Agency Guarantee Ltd (CPPA-G) to promptly settle its outstanding dues of Rs65 billion to prevent a potential default on an impending debt obligation, The News has learnt.

“We are facing a severe liquidity crisis, imperiling our ability to meet imminent obligations to lenders and suppliers (including fuel supplier),” stated EPTL in a letter to CPPA. 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) — 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 24, the EPTL has received only Rs17 billion against its request for a total disbursement of Rs350 billion to power producers during this time.

“This is not even sufficient to fulfill 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,” the company stated in a letter.

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 (on May 31, 2023) the EPTL’s overdue receivables were Rs39.5 billion.

“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.