Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk of HI- Tech Lubricants Limited (HTL)
Karachi, August 12, 2026: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of ‘A1 (plim)’ (A one preliminary) to proposed Short-Term Sukuk issue of up to PKR 1 billion (inclusive of a Green Shoe Option of PKR 400 million) of Hi- Tech Lubricants Limited (‘HTL’ or the ‘Company’). The short-term rating of ‘A1 (plim)’ indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The preliminary rating will be finalized upon review of final legal documents and remains subject to the trustee’s confirmation of adequacy of the current asset cushion required as security for the sukuk. The entity ratings of the Company are ‘A-/A2’ (‘A Minus/ A Two’) with a ‘Stable’ outlook announced on May 04, 2026.
Hi-Tech Lubricants Limited (‘HTL’ or ‘the Company’) operates in Pakistan’s lubricants and petroleum sectors, with its core business centered on ZIC-branded lubricants blended locally from materials sourced from SK Enmove Co., Ltd., South Korea. As the exclusive distributor of ZIC lubricants in Pakistan, the Company supplies a range of synthetic and semi-synthetic lubricants catering to automotive and industrial applications. Distribution is carried out nationwide through a network of handlers and distributors. HTL also manages its wholly owned subsidiary, Hi-Tech Blending (Private) Limited (HTBL), which commenced commercial blending operations in 2016. HTBL’s principal activities include the ownership and operation of a lubricating oil blending plant, along with the manufacturing and sale of plastic packaging products. These operations primarily support HTL’s lubricant business, while also generating additional revenue through external sales. The Company also has presence in the petroleum sector through its Oil Marketing Company (OMC) operations under the HTL Fuel Stations brand.
The Company plans to issue a secured, privately placed Short-Term Sukuk (STS) of PKR 1 billion (inclusive of a Green shoe option of PKR 400 million) for a tenor of upto six months from the date of drawdown. The proceeds of the Sukuk will be utilized to meet the Company's working capital requirements. The Sukuk will carry a profit rate of 6-month KIBOR plus a spread of 1.30%. Sukuk will be redeemed in bullet at the expiry of tenor and profit payments will be paid at maturity. The instrument will be secured through a ranking charge over the Company's current assets with a margin of 25%. The Issuer shall establish and maintain Finance Payment Account ("FPA") under lien of the Investment Agent whereby deposits equivalent to 1/4th of the total amount due at maturity (inclusive of Redemption Amount and Profit Payment) shall be made starting 49 working days before the Maturity Date, and every fortnight thereafter, such that the full amount due at maturity is available in the Finance Payment Account at least 7 working days before the Maturity Date.
Assigned ratings take in to account moderate business risk profile of the lubricant segment, supported by relatively higher margins, stable demand from automotive and industrial end-users, and the Company’s market position in the premium lubricant segment, backed by nearly three decades of operating history. Further, as fuel marketing business now contributes major part of the revenues, assigned ratings also take into account the high business risk profile of the OMC sector, driven by a regulated pricing regime, intense competitive dynamics, exchange rate fluctuations, volatility in the margins and sensitivity to macroeconomic variables. Notwithstanding these challenges, the Company’s diversified operating profile, with presence across both fuel marketing and lubricant segment provides a degree of earnings resilience. Assigned ratings also incorporate improvement in the Company’s financial profile, particularly during 9MFY26, with profitability margins supported by enhanced operational efficiency and upward price adjustment. The Company’s capitalization profile and coverage profile considered adequate with the debt servicing coverage strengthening during 9MFY26. In addition, ratings reflect operational integration at the Group level, supported by HTL’s wholly owned subsidiary, Hi-Tech Blending (Private) Limited. Going forward, the Company’s ability to enhance market share through volume growth while sustaining profitability amid sector volatility, together with maintaining debt coverage metrics and further strengthening its liquidity and capitalization profiles, will remain important considerations for the ratings.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Instrument Rating
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf