The Pakistan Credit Rating Agency Limited
Press Release


Ayesha Qasim

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PACRA assigns Entity Ratings to Habib Construction Services Limited

Rating Type Entity
(29-Dec-17 )
Action Initial
Long Term A-
Short Term A2
Outlook Stable
Rating Watch -

Habib Construction Services has delivered a number of infrastructure projects in the last couple of years and has built its repute as a "Fast Track" execution company. Lately the company has been engaged in one of the country's largest public sector transportation project - approaching completion. Over the years, Habib Construction Services has earned sizeable profits – contributing to its equity size. The majority shareholder is Mr. Shahid Saleem, while other executives and management members have remaining stake – furnishing fuel to the company’s growth. Construction business is dependent on award of public works (Federal & Provincial PSDP + CPEC). Habib Construction Services has a number of banking lines, predominantly non-funded, required for its construction business. With sustained cash flows, the financial risk profile is expected to remain adequate.
The ratings are dependent on sustaining a steady revenue stream and financial risk profile. Any prolonged downturn in subdued business volume can negatively affect the ratings. Good corporate governance practice is considered essential.

About the Entity
Habib Construction Services (Public) Limited was established in 2009 and stands tall in the construction industry of Pakistan as the pioneer of "Fast Track" project execution culture. Significant construction projects to its credit are Lahore Ring Road, 2X2.5 MW hydel power project at Chashma, 17 storey Bahria Grand hotel, Benazir Bhutto international airport civil works, Beijing underpass Lahore, Kalima Chowk underpass & overhead bridge, Metro Bus projects in Islamabad, Lahore and Faisalabad, etc. to name a few famous ones.
HCS is registered as a public limited company having 29 shareholdrs with five shareholders possessing 74.4% of the shares. The CEO, Mr. Shahid Saleem, has 51% stake in the company and is considered the visionary leader behind the success of the company. The overall control of the company vests in seven-member board of directors (BoD). Apart from the CEO, five directors have executive roles, one is an independent director while the other is from the sponsoring family.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.