Pakistan Credit Rating Agency Limited maintains entity and TFC ratings of Jahangir Siddiqui and Co. Limited

Lahore, May 31, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has maintained the long term and short term entity ratings of Jahangir Siddiqui and Co. Limited (JSCL) at ‘AA’ (Double A) and ‘A1+’ (A One Plus) respectively. Rating of JSCL TFC VIII of PKR 750 mln has been maintained at ‘AA+’ (Double A Plus). The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings reflect 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 include 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 company plans to build exposure in the power sector. The oversight framework for the strategic investments is improving. JSCL has a low leveraged capital structure.

The ratings are dependent on the company’s ability to augment cash producers within its investment book. The improvement in the performance of the company’s strategic investments provides comfort. Diversification of the investment book among sectors would be beneficial. Immaculate financial discipline remains important for the ratings.

For more information, contact:
Hammad Rashid
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com