Lahore June 9 2021: Kot Addu Power Company has declared an interim dividend of PKR5.0 per share for the year ending June 2021. The stock is now trading near floor after touching high of PKR47.1 and gaining more than 20 percent during the last 8 trading session in anticipation of substantial payout by the company.
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IPPs Received First Tranche Of Circular Debt
Earlier, Kot Addu Power Company Limited has received PKR39.6 billion from Central Power Purchase Authority (CPPA-G) on directives of Government of Pakistan. KAPCO has received 40 percent of total overdue receivables as of November 2020 in the form of the form of one third Cash, one third floating rate 10 year Pakistan Investment Bonds (PIBs) and one third Ijara Sukuks.
In return, the Company has signed third amendment to the Power Purchase Agreement (PPA) and Master Agreement, subsequently approved by Federal Cabinet. Pursuant to the terms of these agreement, the outages due to fuel shortages during the period 2008-16 will be treated as Other Force Majeure Event under the PPA and consequently, existing terms of PPA will be extended by 16 months. During this period company will not receive any kind of compensation related to Capacity Payment. However, the company will receive Fuel payments and other pass through items.
WAPDA shall consent to the extension of the PPA for an additional term following the expiry of the extended term as mentioned above. Company could also exercise its option of selling electricity to other bulk buyers.
Further clauses of the agreement includes, existing capacity payments and variable O&M shall be reduced by 11%. USD exchange rate and US CPI indexations shall be discontinued on half of the reduced capacity payment, which shall be fixed at exchange rate of Rs168.6 without any local or international currency indexation or inflation adjustment for the future and the US CPI of Aug’2020. USD exchange rate and US CPI indexations on reduced variable O&M and 50% of the reduced capacity payment shall continue as per existing arrangement.
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