Press Release

VIS Reaffirms Entity Ratings to Engro Enfrashare (Private) Limited

Karachi, September 08, 2023: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Engro Enfrashare (Private) Limited (Enfrashare) at ‘A-/A-2’ (Single A Minus/Single A Two). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on May 06, 2022.

The ratings are underpinned by strong sponsor profile of Enfrashare, which is a wholly owned subsidiary of Engro Connect (Private) Limited. The ultimate parent company is Engro Corporation Limited (Engro), which is one of the largest domestic conglomerates engaged in diverse businesses including fertilizers, LNG, energy, food and chemical sectors. The assigned ratings incorporate TowerCo industry’s medium- low business risk involving extensive lock-in periods, limited scope for termination and an escalation clause in built in the Service Agreement. Tenancy ratio is a key growth driver in TowerCo business, which remains on the lower side in Pakistan and is indicative of room for growth. The ratings also reflect the Company’s retained dominant market positioning. Moreover, the industry’s demand outlook is positive stemming from rising demand of towers in turn being driven by growing mobile data usage, higher population density and increased technology dependence; the same paves way for improved coverage and capacity expansion.

Given high capital expenditure requirements of TowerCo business model, Engro has invested Rs. 6.0b equity in Enfrashare during the review period and is committed to inject up to another Rs. 5.0b in the ongoing year to support the debt servicing of the Company. On the other hand, ratings are constrained by elevated financial risk profile as reflected by loss before taxation recorded, negative FFO coverages and low debt service coverage ratio. Moreover, stemming from financing procured for capital projects undertaken, leverage indicators have increased during the rating review period and continue to be on a higher side. Further, given there are sizable capex plans for expansion in the pipeline, gearing is forecasted to slide upwards or at least remain at current levels in the medium term. Given the current liquidity metrics, the committed and continuing sponsor support through equity injection is a comfort for lenders; the same is also important from the ratings perspective going forward.

For further information on this rating announcement, please contact Ms. Maham Qasim (Ext: 402) at 042-35723411-13 or the undersigned (Ext: 207) at 35311861-64 or email at

Sara Ahmed

VIS Entity Rating Criteria: Industrial Corporates (May 2023):

VIS Rating Scale:

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