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The Pakistan Credit Rating Agency Limited
Press Release

Date
13-Dec-19

Analyst
Usama Liaquat
usama.liaquat@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of Ghandhara Nissan Limited

Rating Type Entity
Current
(13-Dec-19)
Previous
(13-Jun-19)
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Ghandhara Nissan Limited (GNL) operates in the truck segment of the automobile sector. Presently, the company deals in Chinese and European brands. Company's performance was diluted owing to discontinuation of UD Trucks, which they managed to beef up with other alternative products. Ghandhara Nissan has solidified its position in the market through the launch of JAC X-200 and Renault Trucks, recently. The company is also working to come into the passenger car segment. Keeping in view of the current market scenario the turnout of these initiatives is pivotal. The current economic slowdown and rupee devaluation though added pressure on the business profile of the company. Majority ownership of the company is held by Bibojee Group of Companies. Their business acumen is further enriched by the group’s stake in the country’s leading tyre manufacturing company. Foreign players are also taking interest in the local market. The company had arranged long term debt for its expansion project.
The ratings are dependent on upholding of the company’s business as well as financial risk profile. Two key elements are company’s stance on long term debt for potential projects and working capital management. Moreover, management’s ability to sustain its market share while benefiting from positive demand fundamentals is crucial.

About the Entity
Incorporated in 1981, Ghandhara Nissan Limited (GNL) is a group Company of Bibojee Services (Pvt.) Limited - founded by Gen. Habibullah Khattak in 1960’s with interests in various industrial sectors including Textile, Auto, Tyres & Rubber, Insurance and Construction. The principle business of the company is assembly/progressive marketing of vehicles including JAC trucks, import and sale of Nissan, Dongfeng and Renault vehicles in completely built up conditions and assembling of other vehicles under contract agreement. The board comprises ten members; four represent the sponsoring family. Mr. Raza Kuli Khan Khattak is Chairman of the board whereas Mr. Ahmed Kuli Khan Khattak serves as the CEO.

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.