Press Release

JCR-VIS Reaffirms Ratings of Allied Rental Modaraba at A+/A-1

Karachi, December 29, 2014: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Allied Rental Modaraba (ARM) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on July 30, 2013.

The assigned ratings incorporate moderate business and sound financial risk profile of ARM. Liquidity profile of ARM is considered sound in view of healthy cash flows from operations while capitalization levels have strengthened over the years on account of internal profit generation and equity injection through right shares. While gearing has increased on a timeline basis, it continues to remain within manageable levels.

ARM continued to expand its rental fleet during FY14 with over Rs. 2b gross investment in rental assets. Around four-fifth of the total investment pertained to gensets while the remaining one-fifth pertained to logistics and infrastructure segment. Given the continuous investment in rental assets, asset base of ARM has doubled over the last two years. ARM plans to continue to expand its rental fleet with fresh investment of Rs. 2b to be made in FY15. This is planned to be financed through a mix of internal cash flows, issuance of rights shares and borrowings. Gearing levels are projected to remain below 1(x) over the foreseeable horizon. Exposure to credit risk is considered manageable in view of ARM’s ability to repossess assets in the event of non-payment.

The modaraba is managed by Allied Engineering Management Company (Private) Limited, which is a wholly owned subsidiary of Allied Engineering Services Limited (AESL). AESL is the dealer for Caterpillar products in Pakistan. AESL is also an authorized distributor of MCF Material Handling Equipment, Sany Cranes, Ingersoll Rand Compressors, Broad Chillers and IMW CNG Equipment’s in Pakistan.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 (10 lines) or fax to 35311873.

Jamal Abbas Zaidi
Deputy CEO

Applicable Rating Criteria: Modaraba Rating Scale October 2002

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2014 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited