The government has successfully negotiated with five IPPs to terminate their PPAs prematurely. Two of these five IPPs are from the listed space: Hub Power Co. Ltd. (HUBC) and Lalpir Power Ltd. (LPL).
LPL has called an EOGM to seek shareholders’ approval without revealing the details of terms and conditions, but we think the terms will be consistent for the other affected IPPs. As a result, LPL should also receive all pending dues reported as of 1 October 2024.
As per our working, LPL had surplus cash amounting to PKR13.1bn (PKR34.36/sh) net of its liabilities as of 30 June 2024. Following this, we expect LPL to issue a bumper dividend as a final settlement to all shareholders (as LPL has no other power plant). As of June 2024, LPL’s BVPS was reported at PKR47.73/sh.
LPL Valuation | PKRmn |
Cash | 1,440 |
Sales tax recoverable | 2,365 |
Trade debts | 14,856 |
Fuel stock | 2,523 |
Trade payables | 1,576 |
Short term borrowings | 6,559 |
Net cash | 13,050 |
Shares outstanding | 380 |
Cash/sh | 34.36 |
Source: IMS Research, Company Accounts
