Pakistan Credit Rating Agency Limited upgrades entity ratings of Dawood Hercules Corporation Limited

Lahore, January 12, 2016 (PPI-OT): PACRA has upgraded the entity ratings of Dawood Hercules Corporation Limited (DH Corp) – long term rating to “AA-” (Double A Minus) [previously “A+” (Single A Plus)] and short term rating to “A1+” (A One Plus) – the highest on the scale [previously “A1” (A One)].The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings signify the strengthening of holding company stature of DH Corp. The divestiture of DH Fertilizers has brought gains to the company. Going forward, there is absolute focus towards identified sectors, especially energy, with clarity that DH Corp would expand through associates/partnerships primarily. The ratings reflect sustainable improvement in performance of the company’s investments cushioning the overall risk profile. It also incorporates the continuous augmenting of the monitoring mechanism thereby providing strategic guidance to the investee companies.

The oversight of investments is done through a structured process, an important pillar of which is the analytical team in DH Corp with presence of nominee directors on the boards of investee companies. The business acumen of the sponsoring family and their sublime governance practices provide support to the ratings. The ratings are dependent upon the group’s overall risk profile. The targeted growth may not elicit rise in the risk exposure. At the same time, the group’s financial metrics must remain strong.

For more information, contact:
Hammad Rashid
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