Press Release

JCR-VIS Revises Entity and TFC Ratings of Saudi Pak Leasing Company Limited

Karachi, March 29, 2010: JCR-VIS Credit Rating Company Limited has revised the entity rating of Saudi Pak Leasing Company Limited (SPLC) to ‘B/B’ (Single B/B) from ‘BB+/B’ (Double B Plus/Single B). Rating of the outstanding TFC issue of SPLC has also been revised to ‘B’ (Single B).

The rating revision has been taken on account of continued losses from operations during 1HFY10 that have led to a growing imbalance in assets and liabilities. At the same time, erosion of real equity has resulted in alarmingly high leverage levels. Furthermore, as the momentum of in-flows tapers off from the lease portfolio as it approaches maturity and given the significant level of NPLs in the loan portfolio, obligations are deemed less likely to be met.

While sponsors’ support by way of subordinated debt provided some breathing space to the company, the advantage has been lost over the period on account of the deteriorating financial health of the company. Outlook on the ratings remains ‘Negative’ and a fresh injection of sponsor funds at this stage is crucial to stabilize the company.

The Auditors’ Report to the Members on Review of Interim Financial Information for the period ending December 31, 2009, contains qualified conclusion on the recording of deferred tax asset of Rs. 148 million, the benefits of which may not materialize, given the financial position of the company and trends in the NBFCs sector. The auditors have also added Emphasis of Matter on the company’s ability to continue as a going concern in the presence of accumulated losses of Rs. 548 million as at December 31, 2009.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Ms. Sobia Maqbool (Ext: 506) at 92-21-35311861-70 or fax to 92-21-35311873.


Safdar Kazi
Director

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 2010 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .