PACRA Maintains Entity Ratings of Dawood Hercules Corporation Limited
The ratings reflect Dawood Hercules Corporation Limited's ("DH Corp" or "the Company") very strong profile as an investment company with investments in diversified sectors mainly through Engro Corp. DH Corp has structured oversight process in place for monitoring and making new investments, an important requisite for any HoldCo. Sizeable liquid funds are held in money market instruments indicating very strong liquidity. The Company has invested in blue chip market securities exposing it to market volatility. DH Corp is exploring new investment avenues to add to its portfolio. Recently, the Company has announced its plan to tap into technology led business through a newly formed wholly owned subsidiary, Empiric Al (Pvt.) Ltd. Meanwhile, the Company is expected to receive dividends - albeit relatively modest - from it's subsidiary, Engro Corp, as the underlying businesses continue to perform despite challenging environment. However, economic slowdown due to COVID-19 outbreak and significant rate cut (525bps) will impact DH Corp's profitability to an extent. Very strong business acumen of the sponsoring family and strong governance practices provide support to the ratings.
The ratings depend on the management's ability to sustain low risk profile and follow prudent investment policy. At the same time, maintaining strong financial profile and liquidity remains important. Any significant increase in debt and/or prolonged downturn in invested companies will impact the ratings.
Dawood Hercules Corporation Limited's ("DH Corp" or "the Company") is a public listed company incorporated in 1968. The principal activity of the Company is to manage investments including its subsidiary and associated companies. Dawood Group (Dawood Family and Associates) holds 34% stake in DH Corp through its’ corporate entities (20%) and individuals (14%). Other related foreign companies hold 54% shareholding in DH Corp, 9% is held by corporate and financial institutions whereas 3% is held by general public. The Company's BoD is chaired by Mr. Hussain Dawood, the patriarch of Dawood family. Mr. Inam-Ur-Rehman is serving as the Company's CEO since Dec-16.