Press Release

VIS Reaffirms Ratings of Grays Leasing Limited

Karachi, December 30, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Grays Leasing Limited (GLL) at ‘BB-/B’(Double B Minus/Single B). The medium to long-term rating of ‘BB-’ denotes that obligations deemed likely to be met. Protection factors are capable of weakening if changes occur in the economy. Overall quality may move up or down frequently within this category. The short-term rating of ‘B’ denotes speculative investment characteristics; liquidity may not be sufficient to ensure timely payment of obligations. Outlook on the assigned rating is ‘Stable’. Previous ratings were announced on December 10, 2019.

Ratings assigned to GLL take into account its weak financial risk profile; the company continues to face challenges of low business volume, limited funding resources and chronic legacy portfolio of non-performing leases against which recoveries have lately remained nominal; a large part of the same has also remained un-provided. The company continues to withdraw funding support from its associated concern and the Chief Executive Officer (CEO); the conversion of sponsor loan to interest-free loan is projected to bode well for the profitability of the company. Further, the ratings take account of leasing activities only diverted towards auto leasing, being a repossessable asset with relatively low risk. The ratings factor in inadequate capitalization and weak liquidity position of the company due to continued losses. Going forward, the oncoming pandemic-induced headwinds are expected to test the portfolio asset quality. The operating environment, therefore, remains uncertain and VIS will continue to closely monitor the company’s performance.

For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8010) and/or the undersigned at 021-35311861-66 (Ext. 201) or email at info@vis.com.pk .



Faryal Ahmad Faheem
Deputy CEO


Applicable rating criterion: Non-Bank Financial Companies (March, 2020)
https://www.vis.com.pk/kc-meth.aspx

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 December 30, 2020 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.