PACRA Maintains the Ratings of Multinet Pakistan (Pvt.) Limited | Digital Infrastructure Facility | PKR 2100 mln | Aug-22

The loan facility represents a structured tri-party arrangement involving Multinet Pakistan (Private) Limited as the Borrower, Habib Bank Limited (serving as the Lender, Security Agent, and Inter-Creditor Agent), and InfraZamin Pakistan Limited in the capacity of Guarantor. While the facility was initially structured at PKR 2,100 million, it was subsequently scaled down to PKR 1,038 million, as indicated by management, in response to the elevated interest rate environment. InfraZamin provides a partial credit guarantee, covering 75% of the outstanding exposure, thereby materially mitigating credit risk for the lender. The proceeds are earmarked for capital expenditures, including the deployment of 100 data center packs (PKR 357 million), expansion of metro fiber footprint (PKR 431 million), tower fiberization initiatives (PKR 100 million), and capitalization of a Debt Service Reserve Account (PKR 150 million). The facility is secured through a comprehensive collateral package, including a pari passu hypothecation charge over present and future movable fixed assets (subject to a minimum 25% margin), assignment of key contracts and receivables routed through a designated escrow account maintained with HBL (with lien and set-off rights), a pledge of 100% of the Borrower’s equity, a personal guarantee and sponsor support agreement, as well as the establishment of dedicated Debt Payment and Debt Service Reserve Accounts. The DSRA is structured to maintain a balance equivalent to 1.5x the peak quarterly debt service obligation, enhancing liquidity coverage and providing additional protection to lenders. Driving a 6.8% increase in the Company's overall topline revenue was the strong performance of its domestic operations. This was particularly evident in the Enterprise business unit, which grew by 15%, and the Carrier Domestic business unit, which achieved a 20% growth rate. While domestic segments thrived, a decline was observed in the revenue generated by the Carrier Business Unit International and Long Distance International divisions.
The given rating is based on the financial risk profile of the borrower as well as the reputation of the Guarantor. InfraZamin Pakistan Limited leverages the prior experience of InfraCo Asia and GuarantCo in supporting infrastructure projects in Pakistan, as well as Karandaaz’s local market knowledge and track record of investments focused on supporting financial inclusion. IZP has been assigned the long-term rating of “(AAA)” by PACRA.

About the Entity
Multinet Pakistan (Pvt.) Limited was incorporated in 1996, as a private limited company. Primary business activity of the Company is to provide telecommunications infrastructure and services. Mr. Adnan Asdar Ali is a major shareholder, having a 99.9% stake. Whereas, Mr. Adnan Hayat Zaidi heads the Company as the CEO. The product slate of the Company comprises provision of broadband & data connectivity related services to corporates, long-haul and metro optical fiber infrastructure requirements for telecom operators, international voice termination, fixed line telephony, and partnering with global carriers to provide broadband and data connectivity solutions to their customers operating in Pakistan.

About the Instrument
Multinet Pakistan (Pvt.) Limited has issued a privately placed secured instrument of PKR 2,100mln. The profit is being paid quarterly in arrears at the rate of 3M Kibor+0.75% p.a calculated on a 365 days basis on the outstanding principal amount. The principal is also being paid in twenty-four equal quarterly installments commenced from Nov-23 after the expiry of the Grace Period