PACRA Assigns Initial Entity Ratings to DEL Engineering Domestic (Pvt.) Limited

DEL Engineering Domestic (Private) Limited (“DEDL” or “the Company”) is one of the Holding Company of DESCON Group. The DESCON Group is a Pakistani multinational group having expertise in sectors such as Oil & Gas, Power, Hydro Power, Dams/Barrages/ Canals, Fertilizer, Renewable Energy, Sugar, Industrial, Chemical and Petrochemicals. The Group’s presence outside Pakistan primarily concentrated to the Middle Eastern region. DEDL manages the foreign portfolio of the group and offers a comprehensive bouquet of services, encompassing Design Engineering, Procurement, Manufacturing, Construction, Commissioning, Industrial Services, and Operations & Management (O&M). DEDL has imprints in countries such as the UAE, Qatar, Saudi Arabia, Pakistan, Kuwait, Oman, Iraq, and South Africa. The Company is also at initial stages of expanding its investment book in the European region. Major portion of total revenue of the Company came from executing plant maintenance in the oil and gas sector with the remaining revenue derived from construction and fabrication-related works. The Company has been successful in acquisition and execution of many projects for blue chip clients globally. Given the nature of the business, DEDL is in no need of a huge capital funding base, when compared to the size of projects it undertakes. However, the non-funded obligations are integral to the business operations. The Company has two types of investment on its balance sheet: core Investment which only include unlisted subsidiaries and non-strategic investments which include short term investments in TDR’s and mutual funds as a strategic liquid reserve to provide cushion against unforeseen risks. The Company primarily drives income from foreign remittance and dividend stream of equity investment in foreign subsidiaries and associates. During FY23, total investment income experienced a significant increase and stood at ~PKR 657mln (FY22: ~PKR 39mln, FY21: PKR 519mln). Short-term investment income comprises of interest received from TDR’s.
The ratings are dependent on the performance of existing investments and the execution of their envisaged business strategies resulting in a regular dividend stream. At the same time, maintaining a healthy project pipeline with strong financial profile and liquidity remains important. Any significant increase in debt and/or prolonged downturn in invested companies will impact the ratings.

About the Entity
DEDL incorporated on July 11,2013 as private limited company in Pakistan. DEDL is wholly owned by the Dawood family, with Abdul Razak Dawood holds ~ 94.27% stake in DEDL, both Taimur Dawood and Faisal Dawood holds ~ 1.15%, Bilquis Dawood holds ~ 2.86% and remaining ~ 0.57% holds by Mehreen Dawood. The seven-member board of directors holds overall control, with four members from the sponsoring family, including Chairman - Mr. Taimur Dawood and Vice Chairman - Mr. Faisal Dawood. The remaining four directors are non-executive. Mr. Taimur Dawood - the CEO, he has over 25 years of diversified experience in engineering, product marketing, project finance, strategy development and implementation and mergers and acquisitions. The registered office of the Company is located at 18-KM, Ferozepur Road, Lahore.