PSO Likely Beneficiary of Ongoing HUBCO Contract Termination
The ongoing premature termination of the Hub Power Company Limited’s (PSX: HUBC) contract with the federal government is poised to benefit Pakistan State Oil (PSO) by enabling HUBCO to settle its outstanding dues.
“This settlement is expected to facilitate HUBC’s payment of its outstanding dues to PSO. Previously, due to delayed payments from CPPA(G), HUBC was unable to make timely payments to PSO,” stated Vice President JS Global, Waqas Ghani.
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According to the FY24 financials, HUBC owes Rs. 28.2 billion to PSO, which constitutes 73 percent of HUBC’s total unconsolidated payables. The settlement will significantly aid HUBC in resolving these pending payments.
The expected payment of Rs. 60 per share on PSO’s outstanding shares will help reduce pressure on the company’s working capital.
HUBC announced on Thursday that it has signed a settlement agreement to terminate its contract with the federal government for its 1292 MW power generation project in Balochistan. The settlement amount to Independent Power Producers (IPPs) undergoing termination will be received within 90-120 days.
