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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Dec-18

Analyst
Ayesha Qasim
ayesha.qasim@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 Entity Ratings of Sayban International

Rating Type Entity
Current
(27-Dec-18 )
Previous
(29-Jun-18 )
Action Maintain Maintain
Long Term BB+ BB+
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

Sayban operates in three segments: i) pesticides ii) seeds and bio fertilizer and ia a leading player in the former segment. It has laid the milestone of introducing ‘bio fertilizer’ in Pakistan. The Company has a sizeable turnover, with the contribution of each segment, while pesticide remains predominant segment in terms of revenue. Profitability of the company is sanguine. Sayban has managed to mark its presence in the marker through operational efficacy. The company is making efforts for improving its market share amidst the large fragmented industry. Sayban is still a partnership, to be converted into a private limited company in coming year. The governing structure is likely to improve as Sayban moves towards corporate structure. Company meets its working capital requirements through a mix of internal cashflows and short term borrowings. However, the financial risk remains good on account of low leveraged capital structure and adequate coverages. Going forward, the sustenance in bottom-line and cash flows, formalizing the governance and financial transparency is vital. The group has also set up another company under the brand of Comega to advance its business penetration.
The ratings are dependent on sustained business and financial profile of the company. Any deterioration to margins and/or cash flows remains critical to the ratings. The domino effect of restructuring is yet to materialize.

About the Entity
Sayban International (Under Sayban Group) incorporated in 2005 as a result of AOP, started its operations in 2007. Sayban has been working independently from 2015 with same shareholding. According to the current shareholding Mr. Muhammad Azam Cheema and Mr. Jamshed Cheema each holding 24.1% shareholding. Major shareholding will move to Mr. Muhammad Azam Cheema and Mr. Shamsher Hussain each 44.18%. Sayban Zarai Markaz (Pvt.) Limited has been formed to acquire the Sayban International after restructuring the ownership.
Sayban, as a partnership, does not have a formal BOD structure. The Company is being run by Partners; they have their repetitive roles in the management of the Company. Going forward, 3 partners (existing 7) will be engaged in the management. Mr. Muhammad Azam Cheema is the CEO of the Company. He possesses vast business acumen spanning over two and half decades. The CEO is supported by experienced management team; a balanced blend of professional people from the industry.

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.