Press Release

VIS Reaffirms Entity Ratings of Arif Habib Equity Private Limited

Karachi, December 30, 2019: VIS Credit Rating Company Limited has reaffirmed entity ratings of Arif Habib Equity Private limited (AHEPL) at ‘AA-/A-1’ (Double A Minus/A-One). Outlook on the assigned ratings is ‘Stable’. The long term rating of ‘AA-’ signifies high credit quality; protection factors are strong. Risk is moderate but may vary slightly from time to time because of economic conditions. The short term rating of ‘A-1’ signifies high certainty of timely payments; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. The previous rating was announced on 31st December 2018.

The assigned ratings incorporate AHEPL’s low leveraged capital structure, diversified investment portfolio and sizeable quantum of liquid investments carried on balance sheet. Ratings incorporate management’s commitment to maintain low leveraged capital structure while future funding requirements for new investments or for meeting any contingent liabilities will be undertaken through equity injection. Ratings are constrained by current dividend stream which is expected to witness limited growth during FY20. The assigned rating to AHEPL is underpinned by strong financial profile and demonstrated track record of funding support by Company’s major sponsor. VIS anticipates support from sponsors for AHEPL, if needed.

During FY19, the Company has invested in National Resources (Private) Limited which has been formed for exploring Mineral Mining opportunities in Baluchistan. AHEPL has also invested in the commercial project to be launched by Javedan Corporation Limited while additional investment in this project is also planned. Despite decline in recurring income during FY19, overall profitability witnessed sizeable growth due to capital gain on sale of investment in real estate.

AHEPL is an investment holding company which aims to acquire interest in group and non-group companies and earn a stream of dividend income along with realized capital gains. Mr. Arif Habib is the majority shareholder of the company holding 99.99% stake. Investment portfolio of AHEPL is diversified with investments in cement, steel, real-estate and fertilizer sector. The investment horizon is spread over diverse sectors with the objective to earn consistent dividend stream in some to long-term value accretion in others.

For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext: 201) at (021) 35311861-66 or email at info@vis.com.pk.




Javed Callea
Advisor

Applicable Rating Criteria: Industrial Corporates (May 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

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, 2019 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.