Press Release

JCR-VIS reaffirms ratings of Saudi Pak Industrial and Agricultural Investment Company Limited at AA+/A-1+

Karachi, June 30, 2009: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the medium to long-term entity rating of Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) at ‘AA+’ (Double A Plus) with a ‘Stable’ Outlook. Short-term rating has also been reaffirmed at ‘A-1+’ (A One Plus).

SAPICO is a joint venture between the Government of Pakistan and Kingdom of Saudi Arabia and the assigned rating takes into account the implicit support of the two sovereign countries. The Kingdom of Saudi Arabia is rated ‘AA-/Stable/A-1+’ by a global credit rating agency.

In the face of increased economic pressures and slump in equity market, the institution was faced with increased rate of delinquencies on its lending operations and significant erosion in value of equity holdings. With significant gain realized on the sale of banking subsidiary, SAPICO was able to absorb the impact of such losses. Dividend distribution to the shareholders for the year stood higher than the profits for 2008, though a rights issue of Rs. 1b was made in 2008 which is expected to be followed by another rights issue in the on-going financial year.

With restricted avenues for deployment of funds in lending operations, the company channeled a greater amount of funds into short term government paper. Liquidity profile has witnessed improvement over the last year and assets and liabilities are well matched. Furthermore, the company plans to diversify its funding sources going forward, by tapping in to the corporate clientele for Certificates of Investment.

For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 501) or Ms. Sabeen Saleem (Ext: 510) at 5311861-72 (12 lines) or fax to 5311873.


Faheem Ahmad
President & CEO

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 2009 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .