CPHGC serves notice to Hubco for $150m SBLC

Our Correspondent
Thursday, Nov 24, 2022

KARACHI: The China Power Hub Generation Company Limited (CPHGC) has served a notice to Hub Power Company Limited (Hubco) for encashment of a standby letter of credit (SBLC) worth $150 million, a statement said on Wednesday.

In a notice to the Pakistan Stock Exchange, Hubco, a joint venture partner and Pakistani sponsor of CPHGC, said it had provided security in the form of a SBLC of $150 million in favour of CPHGC expiring on November 23, 2022.

“An encashment notice has been served today by the CPHGC, under the SBLC, on the issuing bank,” it notified.

“Hubco remains committed to providing the country affordable and uninterrupted energy and taking any and all necessary actions to protect the best interests of its shareholders,” the notice added.

Analysts were of the view that the SBLC was to expire on November 23, and required prior renewal. “If the SBLC is not renewed 15 days prior to the expiry which is the case now, CPHGC’s lender shall have the right to call upon the SBLC,” said Muhammad Arbash of Topline Securities.