Pakistan Credit Rating Agency maintains Entity and TFC Ratings of Jahangir Siddiqui and Company Limited
Lahore, June 20, 2012 (PPI-OT): PACRA has maintained the long-term and short-term entity ratings of the company at “AA” (Double A) and “A1+” (A One Plus), respectively. Meanwhile, the rating of the 6th TFC issue of PKR1,250mln has also been maintained at “AA” (Double A). These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The ratings reflect strong risk absorption capacity of the company attributable to a sizable portfolio of strategic investments, that is largely financed from equity. The portfolio comprises a combination of established and developing companies.
The ensuing dividend stream from the investments supplements JSCL’s financial profile. JSCL oversees investments spread across diverse sectors of economy. The character of the holding company is expected to further strengthen as focus on proprietary trading has diminished. This would also reduce the volatility in JSCL’s earnings as previously observed. Comfort is drawn from low-leveraged capital structure, wherein established dividends offer good debt coverages.
The rating is dependent on new management’s initiatives to strengthen performance monitoring mechanism and facilitate JSCL’s full scale assimilation into an effective holding company. Any unforeseen downturn in the capital market and/or material performance weakening at investee companies adversely impacting the company’s risk absorption capacity would have negative implications for the rating.
For more information, contact:
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