PACRA Assigns the Preliminary Ratings to Loads Limited | PP SUKUK | PKR 750mln | TBI

Loads Limited (‘Loads’ and ‘the Company’) is set to issue a Rated, Secured, Privately Placed Listed Mid-Term Islamic Certificate (Sukuk), PKR 750mln inclusive of a PKR 250mln green shoe option. The proceeds will be utilized to support working capital requirements. The instrument will rank pari passu with the Company’s other secured obligations and will be secured through a first pari passu charge over identified plant and machinery, maintained at a 25% margin. The sukuk shall have a grace period of 6 months following which the outstanding amount shall be repaid in 12 equal monthly installments. The proposed transaction is expected to provide additional liquidity support for the Company’s working capital requirements. The Company operates in Pakistan’s fragmented automotive parts industry, where demand is primarily driven by vehicle production and sales and is served through OEM, replacement, and export markets. Within its product portfolio, the Company generates around 61% of revenue from exhaust systems, 34% from sheet metal components, and 5% from radiators. During FY26, the Company recorded revenue of ~ PKR 7,583mln, with local sales accounting for around 99% of total revenue. The Company’s performance remains exposed to prevailing industry and macroeconomic conditions, including fluctuations in vehicle demand, inflationary pressures, and exchange rate movements. The ratings draw comfort from the Company’s association with Treet Corporation, while its governance framework is supported by an experienced Board and a professional management team. Established internal controls and managerial practices provide support to operational oversight. The financial risk profile is leveraged, supported by comfortable coverages, improved working capital cycle which are largely financed through short-term borrowings.
The ratings are dependent on the Company’s ability to improve its business risk vis-à-vis financial risk profile along with a strategy revamp to sustain the margins. Cautious management strategies amidst an evolving industry environment are pertinent. Moreover, prudent management of financial affairs remains important.

About the Entity
Loads Limited ('Loads' or 'the Company') was established in 1979 as a private limited company and was listed on Pakistan Stock Exchange in 2016. The Company is mainly engaged in the production of auto parts namely: exhaust systems, metal sheet components and radiators. Major stake of ~25.51% is held by Syed Shahid Ali and ~24.68% by Treet Corporation Limited. Syed Shahid Ali chairs the BoD; while, Mr. M. Mohtashim Aftab heads the Company as the CEO. They are assisted by team of experienced professionals.

About the Instrument
The proposed Sukuk will have an 18-month tenor, including a six-month grace period, with a rental rate of 1-month KIBOR + 2.50% p.a. Profit will be paid monthly in arrears, based on the outstanding principal. The purpose of this instrument is to finance the Company's working capital requirements.