Press Release

Ratings of Saudi Pak Industrial and Agricultural Investment Company Limited

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Karachi, June 29, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has revised the medium to long-term entity rating of Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) from ‘AA+’ (Double A Plus) to ‘AA’ (Double A) while maintaining the short-term rating at ‘A-1+’ (A One Plus). Outlook on the assigned rating is ‘Stable’.

SAPICO is a joint venture between the Government of Pakistan (GoP) and Kingdom of Saudi Arabia (KSA). The ratings incorporate support of the two sovereigns. The stand alone position of the company has weakened on account of significant losses incurred over the last couple of years eroding its equity base to Rs. 6.1b, which however remains above the minimum capital requirement for DFIs as stipulated by SBP.

Given the challenging business and economic environment, the company adopted a conservative lending strategy during FY11, thereby reducing gross advances. While gross infection ratio increased, net infection improved on account of higher provisioning charge. Meanwhile, the management plans to restrict investments in capital market to restrict volatility in income arising from this source.

The company hired a new CEO/General Manager in January’12. The company has registered profit after tax of Rs. 226m in the first five months of the on-going year. The strategic plan and course of action of incoming CEO is critical for the rebuilding of operations while the outcome of new long term business strategy and its impact on financial indicators remains to be seen.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA (Ext: 506) at 0213-5311861-72 (12 lines) or fax to 0213-5311873 or Mr. Maimoon Rasheed at 0423-6610681-84 (4 lines).

Javed Callea

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 2012 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