PACRA Revises Instrument Rating of TPL Corp Limited | PP Sukuk | Jun-22

TPL Corp Limited is a holding company for TPL Group. As a holding company, TPL Corp maintains a broad investment portfolio across multiple sectors. Its key subsidiaries include TPL Trakker Limited (TPLT), offering customized digital mapping and tracking solutions; TPL Insurance Limited (TPLI), engaged in general insurance and Window Takaful operations; and TPL Properties Limited (TPLP), which has redefined its business model through the establishment of a REIT Management Company (RMC) and investment in TPL REIT Fund I. The group saw a major transformation when it sold off one of the signature towers Centrepoint via its real-estate arm TPL Properties Limited a 28-storey building located in Karachi. The Group made fresh investments and enhanced some of its existing investment avenues over the last couple of years. Most of these investments, indeed the sizeable ones, were made in the real estate sector. With the prevailing environment, the prospects appear subdued. Apart from that, no new dividend stream was built. TPL Life Insurance Limited achieved listing through a reverse merger with Dar Es Salaam Textile Mills Limited, while TPL E-Ventures focuses on venture capital investments in startups and fintech. More recently, in partnership with Abhi (Private) Limited, TPL Corp completed the acquisition of FINCA Microfinance Bank Limited, marking its strategic entry into the banking sector.
As a holding company, TPL had reliance on dividend income and capital gains. The dividend flow has not reached a significant level. Plus, the capital gains require intended transactions to mature, which is a time taking process, dependent on right pricing and time for execution. As a consequence, the business and financial risk profit the company has plummeted. The sponsor has been able to keep the company float. The capacity for personal financial support is inherently constrained and additionally, the exact quantum remains uncertain and there is always an element of unpredictability. In cognizance of this, the management is following a plan to divest some of its key assets to bridge the liability mismatch. A number of options to raise funds including right shares and financing against shares is also being pursued. Time is crucial, since delays would create more fiscal pressures. To monitor the progress, rating watch has been assigned to the ratings of the Company. Meanwhile, the outlook remains developing. The timely settlement of upcoming debt maturities remains important.
Principal repayments are to be made in Six equal semi-annual installments, two of which have already have been paid amounting to PKR 730mln. Interest is being paid Quarterly; thirteen quarterly profit payments amounting to PKR 1,312mln have been paid.
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About the Entity
TPL Corp is a public listed company. TPL Corp is majorly owned by its parent company, TPL Holdings (Pvt.) Limited (~62%). Meanwhile, ~0.03% of shares of the Company are held by mutual funds. The Company has a free float of ~35% through local and foreign individuals. Mr. Ali Jameel, an established entrepreneur, is the CEO and is aided by a team of experienced professionals.

About the Instrument
TPL Corp issued PP Sukuk amounting PKR 2,190mln in Jun22 to support the reprofiling of existing debt and acquire additional shares in group companies. The profit is being paid quarterly in arrears at the rate of 3M KIBOR + 2.25% per annum calculated on a 365 days basis on the outstanding principal amount. Principal redemption began in Dec 2024. The principal is being paid in six equal semi-annual installments commenced from 23-Dec-24 amounting to PKR 365mln each.