Press Release

JCR-VIS Reaffirms Ratings of Grays Leasing Limited

Karachi, December 26, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Grays Leasing Limited (GLL) at ‘BB-/B’ (Double B Minus/Single B). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on November 09, 2016.

The ratings of GLL take into account its weak financial profile emanating from low business volumes, limited funding sources, chronic delinquent portfolio and inadequate capitalization and liquidity. The company has arranged funding from an associated company and the CEO to finance its operations. While the management has a continuing focus on recoveries from infected portfolio, the likelihood of material recovery in this regard in considered low given aging profile of the leases.

By end-1QFY18, gross and net infection ratios, though continue to remain high, improved primarily on the account of higher lease portfolio and lower NPLs. Provision coverage also improved on account of recovery of NPLs against forced sale value. Nevertheless, net NPLs to total equity has remained sizeable.

The company has been able to build a small clean vehicle leasing portfolio to partly cover its operating costs. Going forward, the management plans to continue selective leasing with ongoing focus on recoveries.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13 or fax to 021-35311872.

Javed Callea

Applicable Rating Criteria: Non-Bank Financial Companies (October, 2017)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited