PACRA Assigns Preliminary Ratings to Trans World Associates (Pvt.) Limited – PPSTS – PKR 1.5bln – TBI

Trans World Associates Private Limited (“The Company” or “TWA”) is set to issue its first Rated, Secured, Privately Placed, Short-Term Sukuk, valued at PKR 1.5bln. The instrument will be redeemed in bullet at the expiry of the tenor. The underlying instrument is secured by a ranking charge over the Fixed Assets (excluding land & building) of the Company, with a 20% margin. Furthermore, the sukuk is secured by way of: (i) All identified business collections of the Issuer to be maintained with Meezan Bank Limited, as per the existing arrangement of the Company, during the tenor of the Sukuk. (ii) The Sukuk Payment Account (SPA) shall be filled with proceeds from these collections under instructions from the Issuer. The Issuer shall ensure that business collections are sufficient to fill the SPA, as per the pre-agreed schedule. (iii) A weekly payment, equivalent to PKR 187.5 million shall be deposited, routed from the collection account to SPA on or before 60 days (last two months) of Sukuk Maturity, with complete funding to be arranged 7 working days before Maturity Date. (iv) The Issuer shall provide Post Dated Cheques (PDCs) along the SPA timeline to the Investment agent, as risk mitigating tool. (v) The SPA will remain under the lien of the investment agent. The SPA will be released by Investment Agent and funds transferred to TWA designated account prior to Maturity Date. TWA is the private sector entity in Pakistan and the only telecom operator that owns and operates a private submarine fiber optic cable system, a distinction that underscores its strategic role in the Country’s digital infrastructure. In addition to its proprietary cable system, TWA is also a consortium partner in international submarine cable projects, enhancing global connectivity and network resilience. During CY25, the Company reported revenue of ~PKR 15,713mln (CY24: ~PKR 13,311mln), reflecting ~18% YoY growth. Profitability remained stable, with gross, operating, and net profit margin at ~47.9%, ~34.0%, and ~18.0%, respectively. The deployment of the new submarine cable system (SMW-6) has been delayed from its original timeline due to geopolitical conflicts in the region, resulting in rerouting and an increase in the overall project cost. Due to which, the Company undertook additional CAPEX to expand the capacity of its existing cable systems to meet the country’s growing bandwidth demand. Furthermore, the Company has planned to expand its data center rack capacity to diversify revenue streams and address the rising global demand driven by artificial intelligence and cloud-based applications. The Company’s financial risk profile is considered adequate with modest coverages as the company is in expansionary phase, adequate cashflows and working capital cycle. Capital structure is leveraged, with borrowings primarily consisting of short- and long-term loans for working capital, network, and capacity expansion.
The ratings are dependent on the Company’s ability to maintain its leadership position amid a dynamic environment. With the increase in the leveraging, the maintenance of sound financial discipline is imperative to hold. Compliance with the terms and conditions of the instrument is important.

About the Entity
TWA incorporated in Pakistan as a private limited company on October 01, 1980. Board consists of eight directors. Mr. Junaid Iqbal is the CEO, while Mr. Saad Muzaffar Waraich is the President of the Company and Mr. Asif Inam is the Deputy CEO & COO, they all have a strong telecom industry profile.

About the Instrument
Trans World Associates (Pvt.) Limited is set to issue its first Rated, Secured, Privately Placed, Short-Term Sukuk, valued at PKR 1.5bln. The purpose of the issuance is to fund the working capital requirements of the Company. This Sukuk features a markup of 6MK+0.65% with a tenure of six months.