Press Release
VIS Assigns Preliminary Rating to Proposed Convertible Sukuk of LSE Venture Limited
Karachi, May 14, 2025: VIS Credit Rating Company Limited (‘VIS’) has assigned preliminary rating of ‘AA- (prelim)’ (Double A minus (Preliminary)) to LSE Ventures Limited’s (‘LSEVL’ or the ‘Company’) proposed Convertible Term Sukuk. Medium to long term rating of ‘AA-’ indicates high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Outlook on the assigned rating is ‘Stable’.
LSE Ventures Limited was registered on July 18, 2022 under the Companies Act, 2017 as a public unlisted company limited by shares. In June 2023, the Company obtained the listing status under the symbol "LSEVL" at Pakistan Stock Exchange (PSX) as a result of demerger scheme approved on April 26, 2023 by the Honorable Lahore High Court (LHC), accomplished through a reverse merger with Data Textiles Limited.
The Company intends to issue a redeemable and convertible Sukuk amounting to PKR 2.0 billion to invest in the revival of Jamshoro Joint Venture Limited (JJVL). The Sukuk will be offered to LSEVL’s existing shareholders through a one-to-one rights swap. The Sukuk will have a tenor of up to four years, including a one-year grace period. After the grace period, the principal amount will be repaid in equal installments every six months over the remaining term. Sukuk holders will have the option to convert their holdings into ordinary shares of LSEVL at a conversion price of PKR 30 per share after 12 months from the issue date. The Sukuk will be secured through a ranking charge, which will be upgraded to pari-passu status within 180 days, on JJVL’s assets, including land, buildings, and plant & machinery for PKR 2.0 billion, with a margin of 25%. Additionally, the security includes a pledge of JJVL shares by its sponsors. A Facility Payment Account (FPA) is to be established, holding an amount equal to one upcoming installment amount for the tenor of the Sukuk on a rolling basis. An amount equivalent to one-sixth of each forthcoming installment—comprising only the rental/profit amount during the first year and both the principal and profit/rental amount thereafter—will be transferred from the Collection Account (maintained separately by JJVL) to the FPA. The management of this account will be undertaken by the designated Escrow Agent.
The assigned rating remains underpinned on execution of the draft agreement between JJVL and SSGC for the supply of gas throughout the Sukuk tenor, as well as an undertaking from JJVL’s sponsor to cover any cost overruns necessary for the plant's restart. The finalization of the rating will also take into account the execution of the Operations & Maintenance (O&M) agreement, along with the completion of JJVL/LSE's due diligence to ensure satisfaction with the contractor's capability.
The rating will be finalized upon confirmation by the legal counsel regarding the execution of all security and project documents.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Instrument Rating
https://docs.vis.com.pk/docs/Rating-the-Issue-Aug-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf