PACRA Maintains Entity Ratings of Mega Conglomerate (Pvt.) Limited

The ratings herein reflect the affiliation of Mega Conglomerate (Private) Limited ('the Company') with the Mega & Forbes Group of Companies, a well-established conglomerate with a formidable presence spanning the domains of energy, cement, shipping, logistics, real estate development, and the food industry. The operational framework of the Company is characterized by a holding company structure, strategically designed to facilitate the acquisition and consolidation of the Group's investments in the energy, real estate, and food sectors. The Hub Power Company Limited (HUBCO) holds an integral position within the Mega Conglomerate, with a substantial ownership stake of 19.4%. The company extends its influence across diverse sectors, manifesting through its interests in Haleeb Foods via Mega Foods (Pvt.) Limited, real estate investments facilitated by Imperial Developers and Builders (Pvt.) Limited. The Company derives its primary revenue from the dividend streams generated by its underlying investments. During FY23, the Company experienced a noteworthy surge of ~109% in its dividend income from HUBCO. This augmentation has contributed to an enhanced financial performance when compared with preceding year. HUBCO maintains a robust footprint in the power sector, with strategic investments in Narowal Energy Limited, Laraib Energy Limited, and China Power Hub Generation Company. Collectively, these ventures boast a cumulative installed power generation capacity of 3,581MW. The company bears significant financial charges due to debt incurred for its investment portfolio. Although highly leveraged, the debt is fully secured by liquid assets, including HUBCO shares. The equity base is reinforced through equity injections and subordinated loans from sponsors and affiliated companies. Looking ahead, a consistent dividend stream, strengthened by energy sector investments, is anticipated to bolster the company's financial profile. Additionally, the favorable ratings are supported by ample liquid investments, particularly in TFCs, on the company's balance sheet, with the expectation of sponsor support if needed.
The ratings hinge on the performance of current strategic investments and the effective execution of their envisioned business strategies, leading to a consistent dividend stream. Enhancing the governance framework is imperative for maintaining and improving the ratings.

About the Entity
Mega Conglomerate (Pvt.) Limited was incorporated as a private limited company in 2010 under the repealed Companies Ordinance, 1984. Mr. Habibullah Khan is the founder and Chairman of Mega & Forbes Group. Mega has strategic investments of 26bln in the associated companies - The Hub Power Company Limited (HUBCO) and in two wholly owned subsidiaries – Mega Foods (Pvt.) Ltd., and G4 Mega Pakistan (Pvt.) Ltd. (G4). The Company is owned by Mr. Habibullah Khan (~ 56%) and Mrs. Nusrat Khan (~ 44%). Mr. Habibullah is also the CEO of the Company, and Chairman of the Board. The registered office of the Company is situated in Karachi, Pakistan.