Pakistan’s biggest petroleum handler, Pakistan State Oil (PSO) is on the verge of financial collapse since its outstanding dues from various ‘energy sector’ entities has reached to the extent of Rs180 billion (which is the highest in four years). It seems that no bailing out is forth coming from ministry of finance (MoF). Actual cash flows of the entity have gone negative due to incidence of more short term loans to keep daily operations afloat. It is imperative that the calculation of DCF value of such an entity may be a futile exercise and thus tantamount to mislead investors.
