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The Pakistan Credit Rating Agency Limited
Press Release

Date
02-Jul-21

Analyst
Timnat Thomas
timnat.thomas@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 Rating of TPL Trakker Limited | Sukuk-I | May-16

Rating Type Debt Instrument
Current
(02-Jul-21)
Previous
(29-Jun-20)
Action Maintain Maintain
Long Term A+ A+
Short Term - -
Outlook Stable Stable
Rating Watch - Yes

The ratings incorporate TPL Trakker's prominent position in Pakistan’s tracking industry, emanating from its multifaceted product portfolio and sanguine technology infrastructure. The Company is gradually shifting towards business avenues that are more beneficial for the Company’s growth. The new segments have already achieved above par results, however, incremental yet consistent cash flows remain pivotal. The Company has acquired majority stake in Trakker Middle East LLC, with a view to enhance its presence in the Middle East market. Post-merger, TPL Maps & TPL Rupiya into TPL Trakker, the mapping division and locations based Services (LBS) has progressed significantly. Moreover, the Company stands as a public listed company since Aug’20. Underpinning the IPO, was the Privately Placed Commercial Paper (PPCP) which is now completely paid off. The Company continues to face the pressure of high finance cost on account of its leveraged book, resulting in an overall bottom-line loss by the end 9MFY21. The situation accumulates the impact of COVID-19 pandemic in the country which has led to severe economic disruption and demand deceleration. Currently, the Company’s financial risk profile exhibits improved interest and debt coverages alongside capital structure and cash conversion cycles, endurance of which is necessitated.
TPL Trakker Limited (TPLT) – is now a Public Listed Company - since it got listed on the PSX in the month of Aug’20. Previously it was a wholly-owned subsidiary of TPL Corp Limited. TPL Trakker is a telematics solution provider and the core business mainly comprises vehicle tracking, fleet management, Internet of things (IoT) and Digital mapping services. TPL Corp is a ~62.41% subsidiary of TPL Holdings. Post-IPO, TPL Corp Limited is the major shareholder of TPL Trakker Limited with ~64% holding. BoD of the Company comprises eight members, headed by the Chairman Mr. Jameel Yusuf. Mr. Sarwar Ali Khan is the CEO of the Company, having more than a decade of experience and has been associated with the Company for the last three years.

About the Entity
TPL Trakker Limited (TPLT) –now a Public Listed Company – was previously a wholly owned subsidiary of TPL Corp Limited. TPL Trakker is a telematics solution provider and the core business mainly comprises vehicle tracking, fleet management, Internet of things (IoT) and Digital mapping services. TPL Corp is a ~62.41% subsidiary of TPL Holdings. Post IPO, TPL Corp Limited is the major shareholder of TPL Trakker Limited with ~64% holding. BoD of the Company comprises eight members, headed by the Chairman Mr Jameel Yusuf. Mr. Sarwar Ali Khan is the CEO of the Company, having more than a decade of experience and has been associated with the Company for the last five years.

About the Instrument
TPL Trakker Limited issued an unlisted and secured Sukuk of PKR 600mln, on April 08, 2016. The tenor of the instrument initially was 5 years which extended to six years due to deferment of the principal amount availed from Jan'2020 to Jan'2021. The Sukuk was issued to meet TPLT's working capital and business expansion requirements. The issue has quarterly coupon payments payable at the rate of one year KIBOR plus 3% based on Shirkat-ul-Milk arrangements. Redemption of Sukuk is being made in four equal semi-annual instalments which started from the 42nd month (Nov'19) and will end on the 72nd month (Apr'22). The security structure of the Sukuk comprises, in addition to ranking charge on current assets, shares of TPL Properties Limited pledged with an Investment Agent with 20% margin - marked to market value.

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.