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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Dec-19

Analyst
Muhammad Noor Ul Haq
noorulhaq@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 Kingcrete Builders

Rating Type Entity
Current
(27-Dec-19)
Previous
(28-Jun-19)
Action Maintain Upgrade
Long Term BB+ BB+
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

The ratings reflect the Kingcrete’s history of four decades and the extensive experience of partners in the civil construction and engineering business. The firm has exhibited renewed energy ever since the induction of the second generation. Kingcrete Builders was originally focused on construction and building works but recently the firm has expanded its wings and is working on multiple projects of varying sizes and nature. Adequate pipeline of projects to be executed next 12-24 months, provides sizable revenue visibility for the medium term. As the entire income is tender-based, revenue depends on the firm's ability to bid successfully. Therefore the working capital requirement also depend on the project in execution; wherein performance guarantees are essential. This leads to a high dependence on bank lines to fund working capital. The expansion in business is expected to reflect positively on the future risk profile of the entity.
The ratings are dependent upon the corporate governance principles, internal control systems and financial strength of Kingcrete Builders. Adherence of sound financial discipline while improving working capital management and strengthening debt servicing capacity through improving cash position is pivotal for the ratings. Improving the topline and sustaining it is also vital.

About the Entity
Kingcrete was established in 1976 and since its inception has undertaken projects in all major fields of civil engineering and allied electrical works. Kingcrete Builders is registered as a partnership concern with five partners. The founder-Mr Nawaz A Minhas and his brother, Mr Ijaz A Minhas are senior partners, with his two sons, Mr M Nadir Minhas and Mr M Sikander Minhas, and his relative Mr Saeed A Malik, as partners of the firm. The registered office is situated at 2-C south Park Avenue, Phase-2, Defense Housing Authority, Karachi.

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.