Press Release

VIS Assigns Initial Ratings to Yaqeen Developers Limited

Karachi, June 03, 2021: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB/A-2’ (Triple B/A-Two) to Yaqeen Developers Limited (YDL). The medium to long-term rating of ‘BBB’ denotes adequate credit quality coupled with reasonable protection factors. Moreover, risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is ‘Stable’.

YDL is a part of Citi Group of Companies, having business interests in pharmaceutical, real estate, consumer products, consumer electronics, and IT services. Foundation of Citi Group was laid down with the establishment of Citi Group Investment Holdings Limited in Hong Kong. Currently, entire shareholding of YDL is with the sponsoring family. YDL’s aim is to carryout real estate development projects and is currently working on two affordable housing projects namely Mayfare Mangial near Islamabad and Residential Tower in Lahore. Land for Mayfare Mangial project spread over 424 kanal in Fateh Jang, near Islamabad, has already been acquired while acquisition of land for Tower project spread over 25 kanal, near Bahria Town Lahore, is expected to be completed soon.

Both projects are still in the initial stages of development, therefore, project execution risk is considered on the higher side along with considerable demand risk. Given a marginal cushion available between cash inflows and outflows, timely completion of project milestone without any significant cost overruns and maintenance of sales and collection efficiency will remain critical to avoid cash flow mismatch over the construction period of the project.

Cash flows requirement for the development and construction expenditure of both projects is mainly planned to be met through advance booking receipts and Sukuk issuance, as the sponsors’ equity has already been employed in the form of land and early development work-in-progress. Issuance of a hybrid Sukuk of Rs. 1.5b is in the pipeline; half of the Sukuk will be repayable in 3 years with a grace period of 1 year while remaining Sukuk will be converted into equity during FY24.Timely launch of both projects and matching of booking receipts with the development and construction expenditure ,mandatory conversion of half of the Sukuk into equity as planned, or earlier if required to meet the financial obligations, and fresh equity of Rs. 300m from the initial public offering in FY22 are important rating factors. The ratings are dependent upon mandatory collection of customer advances and installments, and Sukuk proceeds into an escrow account that will only be utilized for the development and construction of the projects.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at021-35311861-70 (Ext: 201) or email at

Javed Callea

VIS Entity Rating Criteria Corporates (May 2019)

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited