Press Release

JCR-VIS Assigns Ratings to Javedan Corporation Limited

Karachi, April 04, 2018: JCR-VIS Credit Rating Company Limited has assigned entity ratings of ‘A+/A-1’ (Single A Plus/A-One) to Javedan Corporation Limited (JCL). The proposed Rs. 3 billion Sukuk planned to be issued by JCL has been assigned a preliminary rating of AA- (Double A Minus). Outlook on the assigned ratings is ‘Stable’.

JCL is in the process of development of “Naya Nazimabad” (NN) project. NN is a housing scheme targeting the progressive middle class segment of the society and is spread over 1,366 acres of land. The project includes bungalows, open plots, flat and commercial sites, apartments, malls, shopping centers etc. The first phase of NN was launched in the year 2011 spread over 513 acres of land and subsequently launched 78 acres in 2015. Major portion of inventory of Phase-1 has been sold while the management plans to launch the Commercial Area of approximately 60 acres during the 3rd quarter of the ongoing calendar year.

The assigned ratings to JCL reflect moderate business risk, strong financial risk profile and implicit support of the company’s majority shareholder, Arif Habib Group. Assessment of business risk profile take into account strong brand name developed over the years, within the city location of the project, security features and amenities on offer. Quality of amenities planned and in place is expected to bode well for future sales. Business risk profile draws support from the sizeable land bank available with the Company, which has significant value despite incorporating a notable discount from current prices.

Financial risk profile is strong as evident from low leveraged capital structure, strength of balance sheet and adequate cash flow profile. Cash flow requirements for funding of development and construction expenditure of commercial area of the project is planned to be met through booking receipts. Timely completion of key milestone of the commercial project without any significant cost and time overruns while maintaining healthy sales velocity and collection efficiency, as projected, will remain critical to avoid cash flow mismatches and will be the key rating sensitivities, going forward.

The assigned ratings to the Sukuk incorporate strong debt servicing ability of the Company and the strength of the debt servicing mechanism of the Sukuk. Principal amount of the Sukuk is Rs. 3billion and will have a tenor of 8 years inclusive of a grace period of 2 years.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Jamal Abbas Zaidi (Ext: 516) at 35311861-70 (10 lines) or fax to 35311873.

Javed Callea

Applicable Rating Criteria: Industrial Corporates - 2016

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited JCR-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.JCR-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.JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.JCR-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 2018 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited