The ongoing premature termination of the Hub Power Company Limited’s (PSX: HUBC) contract with the federal government will likely help the company pay outstanding dues to Pakistan State Oil (PSO).
“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,” Vice President JS Global Waqas Ghani said in a statement.
As per FY24 financials, HUBC owes Rs. 28.2 billion to PSO (73 percent of total HUBC unconsolidated payables). This settlement will allow HUBC to resolve these pending payments.
The said amount (Rs. 60 per share on PSO outstanding shares) would help reduce pressure on working capital for PSO.
HUBC said on Thursday 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 IPPs that are being terminated will be received in 90-120 days.
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