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The Pakistan Credit Rating Agency Limited
Press Release

Date
25-Aug-20

Analyst
Raniya Tanawar
raniya.tanawar@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 Maaksons Engineering Corporation Limited

Rating Type Entity
Current
(25-Aug-20)
Previous
(27-Aug-19)
Action Maintain Maintain
Long Term BBB+ BBB+
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Maaksons Engineering Corporation Limited, previously known as M. A. Aleem Khan & Sons (Pvt) Limited, has been in the construction industry for many decades. The company has three generations of the sponsoring family in the business and has two main offices – Lahore and Islamabad. The sponsors have a very good understanding of the business. The reporting and functional responsibilities are clearly demarcated. Over the years the entity has delivered multiple projects. MAAKSONS has a no limit contract license. Given the slowdown in the economic activity, maintaining a continued healthy business profile has been a challenge. Since, construction business is dependent on contractual based work it heavily suffered due to COVID-19 outbreak when the entire industry was under complete lockdown, also replicating in the 9MFY20 topline. Henceforth, as an alternate solution, the company has built a portfolio of properties. The envisaged strategy is to reduce reliance on contractual business and develop these properties with a view to ensure revenue sustainability in the future. Properties are diverse and furnish different propositions to translate them into revenue streams. The company has a mix of funded and non-funded banking lines to facilitate its business. The company has a defined strategy of building assets, required for its operations as well as investment purpose, through surplus cash. Occasionally, funded facilities are also utilized to finance acquisition. Overcoming the aftermaths of COVID-19 pandemic would be vital for the business.
The ratings are dependent on the outcome of new upcoming and ongoing projects, sustaining a steady revenue stream and financial risk profile management. Any prolonged downturn in subdued business activity can negatively affect profitability. Good corporate governance practice is considered essential.

About the Entity
Maaksosn Engineering Corporation Limited, initially named as M. A Aleem Khan & Sons, officially registered as a Company in 1984 but has been in business since 1951. MAAKSONS scope of work comprises construction of roads and highways, bridges and structures, residential and commercial buildings, canals and tunnels, etc. Significant projects to its credit are Signal Free Corridor Islamabad Highway and in DHA Lahore, Metro Lahore, 29 storey Telecom Tower Islamabad, Gulberg Green, 3x210 Thermal Power Station Muzaffargarh, Chashma Canal, etc. to name a few. It is currently focused on a few major projects in Lahore including, a multipurpose complex - Panta Square and a housing society - Prism 9.
BOD comprises nine members, all of whom belong to the sponsoring family. They collectively have complete ownership of the company.

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.