PACRA Assigns Initial Entity Ratings to Airlink Communication Limited - PPSTS-X - PKR 2.0bln | Mar-26

Air Link Communication Limited (hereafter ‘Airlink’ or ‘the Company’) has issued its tenth Rated, Secured, Privately Placed, Short-Term Sukuk-X on March 12th, 2026. The underlying instrument is secured by a ranking charge over the Company’s Current Assets. The issue includes a built-in call option, enabling the Company, after 60 days from the date of first disbursement, to exercise the option, in whole or in part, by providing fifteen (15) days’ prior written notice to the Lenders/Financiers. Airlink primarily operates in two business verticals: i) mobile phone distribution and retail, and ii) assembly of smartphones and related products in Pakistan. The assigned ratings reflect Airlink’s solid business profile, underpinned by its established market position, longstanding relationships with leading global brands, and a diversified revenue base. Its vertical integration further strengthens its operations, from assembling mobile devices for leading brands to distributing them through a nationwide network. Airlink’s wholly owned subsidiary, Select Technologies, is the exclusive local assembler for Xiaomi Pakistan, a subsidiary of the global electronics giant Xiaomi Corporation. Airlink is one of Pakistan’s leading mobile phone distributors, with partnerships spanning Xiaomi, Samsung, Apple, Tecno, Itel, and, more recently, Hisense. During 3MCY26 (Jan–Mar’26), local mobile phone production declined ~2.6% YoY to 7.36 million units, comprising ~3.94million 2G phones and ~3.42 million smartphones, while imports increased to 1.22 million units. This trend reflects growing consumer preference for premium and technologically advanced devices, alongside competitive and demand-side pressures on domestic assemblers. In line with broader industry trends reflected in PTA statistics, the Company’s consolidated sales declined modestly by ~12.7% YoY during 9MFY26. However, the Company’s profitability margins have significantly improved over the years, supported by sustained gains in cost discipline and operational efficiencies. Airlink meets its working capital needs through a mix of bank borrowings and short-term papers. The Company has designed a discipline around the total leverage and the extent of commercial borrowings. At the absolute level, the leverage appears high, but net of cash and guarantee margin, the leverage turns out to be in the manageable range, which is the objective of raising the funds. The debt payment account, which is filled rigorously from internal cash flows, mitigates the risk as well. On the operational front, the Company has successfully launched and commenced production of Hisense air conditioners and LED TVs at its new facility in Sundar. Going forward, effective working capital management and the successful commercialization and scale-up of these newer product categories will remain critical to sustaining operational momentum, profitability, and overall financial stability.
The assigned ratings are contingent on the Company’s ability to uphold its market position in a rapidly evolving, technology-driven industry. Continued adherence to agreed financial covenants, particularly maintaining full coverage of free cash flows from operations (FCFO) to gross sukuk obligations and preserving the desired level of leverage, will remain critical.

About the Entity
Airlink is a public listed company primarily engaged in the distribution and assembly of mobile phones and allied products. Mr. Muzaffar Hayat (CEO) and the family own a majority stake in the Company.

About the Instrument
The Sukuk-X carries a markup of 6MK+1.20%, with a tenor of six months. The repayment of principal and markup will be done in a bullet upon maturity. The purpose of the instrument is to finance the Company’s growing working capital requirements.