Karachi October 30 2024: Hub Power Company Limited received PKR 36.46 billion from CPPA(G) as part of settlement for termination of plant, according to latest financials released by the company.
Share price of the company drops PKR 1.82 or 1.73 percent in last trading session at Pakistan Stock Exchange.
“Subsequent to September 2024 quarter-end, company negotiations were held with the Task Force constituted by Prime Minister of Pakistan to implement structural reforms in the power sector. This culminated into a Negotiated Settlement Agreement with the Government of Pakistan (GoP) and CPPA(G)” states company in its financials.
“Under the Agreement, all rights and obligations under PPA, IA and Sovereign Guarantee cease upon termination effective October 1, 2024” states the report
As a part of the Agreement, GoP and CPPA(G) have agreed to settle the Company’s outstanding receivables up to October 1, 2024. CPPA(G) has agreed to reimburse the Company if sales tax apportionment on Capacity Purchase Price (CPP) is decided against the Company. Furthermore, WWF and WPPF accrued till June 30, 2024, when decided by the Supreme Court, will be reimbursed to the Company by CPPA(G). It was also agreed that all outstanding obligations of the Company towards PSO will be assumed by CPPA(G)/GoP. Subsequently, the Company has received PKR 36.46 billion from CPPA(G) out of the net receivable amount of PKR 36.5 billion.
Short-term borrowings have risen to PKR 40.1 billion as of September 2024 compared to PKR 26.6 billion in June 2024, as the company has provided a long-term loan of PKR 23.0 billion to its subsidiary.
