PACRA Maintains Entity Ratings of TPL Corp Limited

The rating reflects TPL Corp Limited's ("TPL Corp" or "the Company") diverse pool of investments and its evolving structure as a Holding Company. TPL Group entered in the business arena through vehicle tracking and insurance business. The existing investment portfolio is still evolving and has yet to establish consistent stream of dividend income for the Company. TPL Insurance remains a stable investment on the Company's book. However, did not generate substantial dividends for TPL Corp. TPL Trakker Limited and TPL Properties Limited remain prominent players in respective sectors. They are adding debt and yet to generate sizeable dividends. TPL Life Insurance Limited provides complete health and life insurance products. TPL Maps (Pvt) Limited is the only licensed company in Pakistan for mapping and navigation solutions. TPL Rupiya (Pvt) Limited facilitates cashless payments. The recent merger of TPL Maps and TPL Rupiya into TPL Trakker are expected to bring in synergy at Group level.

On standalone basis, TPL Corp has yet to receive consistent dividends/payout from its investments. The Company has divested its stake in TPL Insurance recently and is looking to bring its shareholding further down through strategic sale. TPL Trakker Limited has initiated the process of listing on Pakistan Stock Exchange. Meanwhile, plans to convert TPL Properties (mainly Centrepoint building) into a REIT to realize value are also in place. These initiatives have been delayed and timeline for their materialization remains uncertain amidst COVID-19 outbreak and prevailing economic conditions. The Company raises debt (through debt instruments or utilizing borrowing lines) to meet financing requirements of its subsidiaries/associated companies. Currently, it has a debt free capital structure as the latest debt instrument was fully redeemed in Jan-20. Going forward, the Company plans to issue another Sukuk, of PKR 1,000mln to generate funds to increase its stake in its subsidiary company. The coverages may remain constrained in the absence of material dividend income but recent cut (425bps) in interest rate would provide respite. The ratings take comfort from demonstrated support of sponsors to provide support and raise funds. Strong governance framework remains beneficial for the ratings.
The ratings depend on the projected performance of existing strategic investments and materialization of envisaged business strategies to generate funds for the Company. The timeline for these initiatives has been pushed back due to COVID-19 outbreak and tough economic conditions. Any significant delay in this leading to low return on investments and/or compromised position of the Company to meet its financial obligations will impact the ratings. Maintenance of adequate resources for repayment would be crucial.

About the Entity
TPL Corp Limited (formerly known as TPL Trakker Limited) is a public limited company listed on Pakistan Stock Exchange. The Company is principally engaged in making investments in Group and other companies. TPL Trakker Limited was incorporated in Pakistan on December 04, 2008, as a private limited company and converted into public company in 2009 and got listed on Pakistan Stock Exchange Limited on July 16, 2012. The name of the Company has been changed to TPL Corp Limited w.e.f. November 24, 2017.

TPL Corp is majorly owned by its parent company, TPL Holdings (Pvt.) Limited (62.41%). Around 6% shares are held by foreign companies and financial institutions. Remaining shares are owned by the general public.