PTCL injects PKR 4 Billion in U Microfinance Bank for growth

Islamabad, December 31, 2018 (PPI-OT): Pakistan Telecommunication Company Limited (PTCL) has signed an agreement for PKR 4 Billion Unsecured Subordinated Debt Facility (Tier 2 capital) with U Microfinance Bank (U Bank), which is a wholly owned subsidiary of PTCL. This capital injection will enable the bank to further capitalize on the growth opportunities possible in Pakistan’s microfinance sector.

In the constantly changing competitive landscape, this Tier 2 facility will enable U Bank to expand its current customer reach for serving the under-served population. U Microfinance Bank plans to utilize these funds in its business operations and expansion plans. Serving its customers through disruptive innovation and digitization, the bank will focus on achieving its growth targets.

Not only will it enable the bank to utilize additional capital with flexibility as it grows, the debt amount will also contribute towards U Bank’s Supplementary/ Tier 2 Capital for Capital Adequacy Ratio (CAR) as per the guidelines for Microfinance banks that are set out by State Bank of Pakistan (SBP).

On the occasion, Dr. Daniel Ritz, President and CEO PTCL, and Chairman U Microfinance Bank, said, “Seeing the potential in U Microfinance Bank’s ability to further expand and grow, PTCL has taken the decision to further inject Tier II capital into the bank. This is in line with PTCL’s commitment to support Pakistan and its economy as a whole.”

Expressing his views, U Microfinance Bank’s President and CEO, Kabeer Naqvi, said, “U Microfinance Bank has been successfully enabling underserved Pakistanis and has been positively contributing towards poverty alleviation and economic empowerment. This Tier 2 injection is a testament to our sponsor’s confidence in our ability to deliver positive results. It also reiterates PTCL’s commitment towards contributing to the economic uplift and enablement of Pakistan.”

Currently, U Microfinance Bank serves more than 850,000 customers, where 22% of the served customers are women. By the end of 2018, U Bank’s deposit portfolio grew from PKR 11.97 billion to PKR 19.0 billion, while the loan portfolio grew from PKR 10.6 billion to PKR 17.0 Billion. Most significantly, the number of employees increased from to 1,321 to 1,980, where 9% of the total work force comprises of women.

PTCL and U Microfinance Bank are at the forefront of fighting poverty in Pakistan and will continue to play their role in improving the economic situation of the people of Pakistan.

For more information, contact:
Pakistan Telecommunication Company Limited (PTCL)
F-8 Exchange, Nazim-Ud-Din Road F-8/1,
Islamabad, Pakistan
Tel: +92-51-111-20-20-20
Fax: +92-51-111-21-21-21
Email: shahzad.khalil@ptcl.net.pk
Website: www.ptcl.com.pk

PSO Block – New Middle School Block for Boys at the Kaghan Memorial School Inaugurated

Karachi, December 31, 2018 (PPI-OT): The Chairman of the PSO CSR Trust, Mr. Yacoob Suttar, inaugurated the PSO Block at the Kaghan Memorial School, District Mansehra, Khyber Pakhtunkhwa, which was built with financial support of Rs. 10 million provided by Pakistan State Oil. Mr. Saleh Muhammad, Member National Assembly from Mansehra District, Mr. Khurram Khan, Managing Trustee of the Kaghan Memorial Trust, teachers, students, their parents and local dignitaries were present on the occasion.

The PSO Block, a Middle School for Boys has state-of-the art class rooms, a staff room, storage and washroom facilities for teachers and students. The new building is now occupied by 120 students who had previously been accommodated in temporary facilities. Over the years, this school building will see thousands of students passing through it as they pursue their aspirations for a better life through quality education.

PSO has been a supporter of the KMT School since 2007, and over the years has consistently contributed to its mission of delivering quality education to children of the serene Kaghan Valley, once devastated by the terrible 2005 earthquake.

Speaking on the occasion, Mr. Yacoob Suttar, Chairman, PSO CSR Trust, said:

“PSO understands that education has the potential to transform the future of our nation. We believe that every child deserves the right to have quality education, no matter what their circumstances are. The PSO CSR Trust, therefore, supports various charities working in the field of education, including the Kaghan Memorial Trust. We spend a significant portion of our corporate philanthropy budget every year to ensure the provision of education for future generations of Pakistan.”

“The recurring contribution made by the PSO CSR Trust towards the development of the Kaghan Memorial School is just an example which reflects the commitment of the Company towards community building and elevation of the undeserved segments of society.”

Mr. Khurram Khan, Managing Trustee of KMT, said:

“We are pleased to join hands with the PSO CSR Trust to ensure that students from deprived communities receive quality education”.

“I would like to express sincere and profound appreciation for the role that PSO has played for furthering the educational attainment of the children of the Kaghan Valley by supporting the charitable Kaghan Memorial School.”

For more information, contact:
Executive-Corporate Communications
Pakistan State Oil (PSO)
PSO House,
Khayaban-e-Iqbal, Clifton,
P. O. Box 3983,
Karachi 75600, Pakistan
UAN: +92-21-111-111-PSO (776)
Ta’aluq Care Line: 0800-03000
Tel: +92-21-99203866-85
Fax: +92-21-99203835
Email: hasan.saeed@psopk.com
Website: www.psopk.com

Badiuddin Akber takes charges as CEO of Central Depository Company of Pakistan Limited

Karachi, December 31, 2018 (PPI-OT): Mr. Badiuddin Akber recently took charge as the CEO of the Central Depository Company of Pakistan Limited (CDC) subsequent to formal approval by the Securities and Exchange Commission of Pakistan. This key appointment has been made while taking into consideration that CDC is a key capital market institution and considered as the Infrastructure Backbone of the Pakistan Capital Market and is credited for the revolution that has brought transparency, credibility and efficiency to the market mechanisms. As the only securities depository in the country, CDC is entrusted with maintaining book-entry securities worth trillions of rupees and manages a diversified portfolio of businesses including Trustee and Custodial Services and Share Registrar Services.

This is the third time in a row that the CEO of CDC has been selected from within its senior management. It is a testament of the company’s effective succession planning and also an expression of continued trust by the board of directors of the company on the senior management.

Mr. Akber has 20 years of senior management experience in the fields of finance and operations in renowned conglomerates in Pakistan including Head of Finance and Company Secretary positions. He has also served as CFO and Chief Operating Officer at the National Clearing Company of Pakistan Limited. At CDC, he was previously serving as the Chief Compliance and Risk Officer and was also the nominated Chairman of the Oversight Committee formed by the SECP under Joint Inspection Regulations, 2015.

He has extensive expertise in Financial Management, Clearing and Settlement, Risk Management, Operations, Product Development and Project Management in the Pakistan Capital Market. He has played a key role in the implementation of various significant products, services and reform measures which include Revamping of Capital Gain Tax Regime, Unique Identification Number (UIN), Institutions’ Risk Management System, Straight Through Processing of Market Settlements, and in the introduction of Leverage Products such as Margin Financing, Margin Trading and Securities Lending and Borrowing.

He is a Fellow Member of the Institute of Cost and Management Accountants of Pakistan (FCMA). He also holds ACMA-CGMA (Chartered Global Management Accountants) qualification from the Chartered Institute of Management Accountants (CIMA – UK) and qualification of Chartered Professional Accountant (CPA, CMA – Ontario, Canada).

For more information, contact:
Head Office,
Central Depository Company of Pakistan Limited (CDC)
CDC House, 99-B, Block B, S.M.C.H.S.,
Main Shahra-e-Faisal, Karachi – 74400, Pakistan
Tel: +92-21-111-111-500
Fax: +92-21-34326031
Email: info@cdcpak.com
Website: http://cdcpakistan.com/

PACRA Maintains Broker Management Rating of JS Global Capital Limited

Lahore, December 31, 2018 (PPI-OT): The rating reflects JS Global Capital Limited’s (JSGCL) strong market position in the brokerage industry emanating from an established franchise with sound geographical footprint, sizeable and sustained market share and cutting-edge technological framework. JSGCL’s experienced management team has a strong focus to deliver quality service to its foreign, institutional and retail clients. It offers various value-added services to its clients including online trading, research portal, and mobile app. A robust IT infrastructure is in place to ensure the smooth running of the operations.

Strong risk management framework exists with an active involvement of the top management to constantly monitor its effectiveness. The rating derives comfort from the company’s investing policy limiting the market risk and liquidity risk. The rating also reflects the company’s strong financial profile with Net Capital Balance of ~PKR 1.7bln as at Sep-18. Going forward, with a focus to provide quality services and continue to be a market leader, the company has deployed an internationally acclaimed brokerage house software in parallel to its existing system and will be rolling this new system in 1QCY19. The company is also willing to act as the market leader once Exchange Traded Fund is launched in Pakistan.

The rating is dependent upon the company’s management ensuring strong control and governance framework continued update of client servicing tools, and careful monitoring of risks – mainly liquidity and market risk – emanating from investment activities. Materialization of efficiencies and effective control envisaged with the implementation of new software is important.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

PACRA Assigns Initial Entity Ratings to SGM Sugar Mills Limited

Lahore, December 31, 2018 (PPI-OT): The ratings draw comfort from strong acumen and support of new sponsors and management in the sugar industry. SGM Sugar is located in Sindh with a crushing capacity of 8000TCD and is recently acquired by ‘United Group’ of Essarani family. The family has long standing experience in agriculture sector and commodity trading including trading in fertilizer and coal, operating a sugar mill (Sindh Abadgar’s Sugar Mills Limited) and ethanol distillery.

Given the size of mill and steps taken by new management, a turn around in operations is expected. The financial risk profile is characterized as highly leveraged owing to loans obtained to re-profile the existing debt and a thin equity base. The Company’s coverages are in a distressed situation for the period. However, planned activity for current crushing season and Sponsors’ commitment to provide financial support provides cushion for the Company.

The ratings are dependent upon increasing capacity utilization level and achieving the operational efficiency envisaged by the management. Any further deterioration in margins and/or cashflows will negatively impact the ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

PACRA Places Entity Ratings of Alfalah Securities (Private) Limited on Rating Watch Developing

Lahore, December 31, 2018 (PPI-OT):Entity Ratings of Alfalah Securities (Private) limited apprehend its emerging position in the country’s brokerage industry. During the year, Credit Lyonnais Securities Asia (CLSA) has acquired 24.9% stake in Alfalah Securities (Pvt.) Ltd. This is expected to bring changes on the board and strategy of the company and impact its overall standing in the industry.

Moreover, there will be a change in entity’s name to leverage CLSA’s strong brand. Considering these developments, PACRA has placed the Entity Ratings of Alfalah Securities (Pvt.) Ltd on Rating Watch-Developing. The ratings will be reviewed after completion of this transition, regulatory approvals and all relevant activities.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

PACRA Maintains Negative Outlook on Entity Ratings of Sui Southern Gas Company Limited

Lahore, December 31, 2018 (PPI-OT): The ratings reflect significant pressure on the company’s financial profile, emanating from substantially high UFG disallowance and other matters pertaining to operating / non-operating income. The management has cushioned it through various means. The recent developments include the proposal of Economic Coordination Committee (ECC) to OGRA to allow gas utility to stagger the impact of remaining amount of PKR 18bln to five years (from FY16 and onwards), which is a relief. Previously, the company had accounted for half impact of PKR 36bln at 4.5% UFG when Sindh High Court dismissed its plea against OGRA which resulted in gas utility booking a loss for year FY17.

Furthermore, ECC proposes OGRA to finalize/adjust the provisional UFG benchmarks set from FYs 2012-13 to 2016-17 in next determinations of revenue requirements of Sui companies in line with the recommendations of benchmark rate in UFG study (fixed benchmark of 5% UFG plus 2.6% for local conditions). However, approval from OGRA is still pending on these both. Timely execution and expected positive financial impact of these is crucial to hold the ratings. High UFG disallowance remains a challenge for the company.

Apart from this, timely settlement of pending receivables is also important as the company’s liquidity profile is significantly stretched. SSGC has not issued its financial statements for FY17, quarterly financials are also pending. However, the BoD is planned in January, 2019 for the approval of June 2017 financial statements.

Given SSGC’s exclusive license to operate in its area of franchise (provinces of Sindh and Baluchistan) and guaranteed return on its net operating assets (17%), the business profile is considered strong. The company’s financial risk profile is stretched owing to (i) high leveraging – a factor of debt-driven CAPEX projects, and (ii) inadequate coverages – due to lower cashflows. The ratings take comfort from SSGC’s strategic importance and association with the GoP.

SSGC is a part of Re-gassified Liquid Natural Gas (RLNG Phase I and II) project. Under the project, SSGC laid down the 338KMs pipeline at the cost of ~PKR 42bln with a capacity of 1.2bcfd to North; operational since Jan17. RLNG Phase III project is pending regulatory approvals. The loan raised to fund the projects carries a sovereign guarantee with repayments commencing in Jun18. Return on the resulting capitalised new assets as well as favourable decision of UFG benchmark rate should support SSGC’s diminished profitability. Consequent cashflows should also provide some respite to financial risk profile in the medium term.

The negative outlook captures the downside arising from unfavourable resolution of UFG benchmark and increased debt level, which will have significant detrimental impact on the risk profile of the company.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com