Pakistan Credit Rating Agency Limited assigns preliminary rating to proposed TFC of Jahangir Siddiqui and Co. Limited

Lahore, May 31, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has assigned a preliminary rating of “AA+” (Double A plus) to the proposed secured privately placed 9th TFC of PKR 1000 mln (inclusive of a green shoe option of PKR 300 mln). Jahangir Siddiqui and Co. Limited (JSCL) plans to issue the said instrument shortly. The rating denotes a very low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The instrument rating reflects JSCL’s strong risk absorption capacity emanating from a sizeable investment portfolio mainly financed through equity. These are pre-dominantly strategic in nature; notably most are listed with adequate liquidity. During the year, the company generated sizeable funds through a right issue and offloading some of its investments. The proceeds were utilized to meet the commitments and enhance the shareholding in the financial sector investments.

The company has also build a non-strategic book of investments having a market value of ~PKR 2 bln alongwith sizeable cash placements. This includes a sizeable investment in a technology sector company. JSCL’s financial profile continues to benefit from the ensuing dividend stream, though currently low, which is expected to increase with improving underlying entities.

The oversight framework for the strategic investments is improving. The company plans to build exposure in the power sector. The company’s sizeable book of investments engenders strong ability to raise requisite funds. JSCL plans to issue a debt instrument. The rating of the instrument draws comfort from the security structure. The rating is dependent on the sustained positioning of the company and compliance with major convents of the instrument.

For more information, contact:
Hammad Rashid
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425