The Pakistan Credit Rating Agency Limited
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Raniya Tanawar

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PACRA Maintains Debt Instrument Rating of TPL Trakker Limited | Sukuk-I | May-16

Rating Type Debt Instrument
Action Maintain Maintain
Long Term A+ A+
Short Term - -
Outlook Stable Stable
Rating Watch - -

The ratings incorporate TPL's leadership position in Pakistan’s tracking industry, emanating from its multifaceted product portfolio and superior technology infrastructure. STE is exposed to border closure risk, nonetheless company has expanded its cargo monitoring business in Pakistan. The company has secured Export Processing Zone mandate which is the 2nd phase of Safe Transport Environment project (STE). This is significantly adding value to the top line; incremental cash flows from new segments are critical for sustainable growth. The company escalated its rental model based business as against sale model. CPEC project is another emerging lucrative opportunity. TPL Trakker is projecting that it will muster a sizable revenue even if continues to garner a fraction of the expected container movement. Multiple yet upcoming diversified revenue streams. The company is raising debt by way of Sukuk bond, bulk of which is utilized in retiring the existing borrowings
The ratings are dependent on upcoming potential projects with strengthened business revenue and financial health. Adherence to good financial discipline while harnessing working capital management and strengthening debt servicing capacity is vital.

About the Entity
TPL Trakker Limited (TPL) – a wholly owned subsidiary of TPL Corp Limited – is a vehicle tracking and fleet management solutions, provider. TPL Corp is a 57.09% subsidiary of TPL Holdings.
The Board consists of four directors; all four of them including the CEO, are representatives of TPL Corp
Mr. Sarwar Ali Khan is the CEO of the company. Mr. Khan, having more than two decades of experience, has been associated with the company for the last two years. He is directly reporting to the Group CEO, Mr. Ali Jameel.

About the Instrument
The company issued an unlisted Sukuk of PKR 600mln, on Apr, 2016, for a tenor of 5 years to meet working capital and business expansion requirements. The issue had quarterly coupon payments payable @ one year KIBOR plus 3% based on Shirkat-ul-Milk arrangements. Redemption of Sukuk was in four equal semi-annual instalments starting from 42nd month (Oct'19) and ends on 60th month (Apr'21).

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.