Press Release

VIS Reaffirms Entity Ratings of Pak China Investment Company Limited

Karachi, June 26, 2023: VIS Credit Rating Company Limited (VIS) has re-affirmed the entity ratings of Pak China Investment Company Limited (PCICL) at ‘AAA/A-1+’ (Triple A/A-One Plus). The medium to long-term rating of ‘AAA’ denotes highest credit quality, with negligible risk factors, being only slightly more than for risk-free debt of Government of Pakistan (GoP). The short-term rating of ‘A-1+’ denotes highest certainty of timely payment, liquidity factors are outstanding and safety is just below risk-free short-term obligations of GoP. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on June 23, 2022.

The assigned ratings of PCICL incorporate implicit support of its two sovereign sponsors, Government of Pakistan (GoP) and People’s Republic of China (PRC), with equal shareholding held through Ministry of Finance (MoF) and China Development Bank (CDB), respectively. CDB has an outstanding rating of ‘A+’ from an international credit rating agency. In the backdrop of challenging economic conditions, disbursements are being made in a highly cautious and conservative manner; the Institution has embarked upon an overall consolidation strategy with sole focus on listed blue chip and rated clients in the medium to long-term horizon. On the other hand, PCICL is exploring the option of debt and equity exposure in high importance sectors to help promote foreign direct investment in Pakistan. The ratings reflect timeline improvement in asset quality indicators given no new case of infection was reported along with initiation of recovery from delinquent clients. However, there is room for improvement in the corporate governance environment as the Board of the Institution is currently not complete & functional. Subsequently, GoP has recently nominated a director on the Board of PCICL, regulatory approval from SBP of FPT is awaited. In addition, the assigned ratings factor in PCICL’s conservative risk appetite in terms of investment policy given no investment is to be undertaken in long-term government securities coupled with stock market exposure only restricted to initial public offerings. The aforementioned strategy has assisted the Institution in successfully avoiding mark to market losses in the increasing benchmark rate scenario prevalent. Further, the ratings are underpinned by strong capitalization, sound profitability and liquidity profile, diversified revenue steam and efforts of the senior management to implement shareholders’ strategic goals and vision.

For further information on this rating announcement, please contact the undersigned at 35311861-70 (Ext: 201) or Ms. Maham Qasim (Ext: 216) at 042-35723411-13 or email at info@vis.com.pk







Javed Callea
Advisor

Government Supported Entities (July, 2020)
https://docs.vis.com.pk/docs/Meth-GSEs202007.pdf

Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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