Press Release

JCR-VIS Reaffirms Entity Ratings of International Complex Projects Limited at AA-/A-1

Karachi, March 5, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of International Complex Projects Limited (ICPL) at ‘AA-/A-1’ (Double A-Minus/ A-One). Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 31, 2016.

Current ratings derive strength from the sponsor’s profile including ‘The Dolmen Group’, a real estate developer operating in Pakistan which has developed & managed renowned commercial and retail projects like the Dolmen City Project. Ratings also draw comfort from ICPL’s sound capitalization levels, low leverage indicators and healthy dividend stream from Dolmen City REIT (DCR) and other group projects. Nonetheless, overall corporate governance framework depicts room for improvement.

The project comprises Dolmen Mall Clifton shopping mall along with four corporate towers; while Executive Tower and Harbour Front have been completed; remaining two towers are currently under development phase. To date, almost 90% of physical construction of these towers has been achieved and their completion is expected by December 2019.

Cash flows of ICPL emanate through two sources: (a) sale proceeds of office space being sold in Sky Tower and (b) dividend income from DCR and rental income from its Corporate Office block. The sale proceeds from office space along with financing facility of approximately Rs. 4b are being utilized for completion of two under construction towers. The floor space in each tower is around half a million square feet (sq. ft.). The company has sold almost 85,000 sq. ft. and expects to sell another 62,000 sq. ft. in the coming year. This along with further sale of office space would enable ICPL to complete the two towers. Moreover, top 10 floors of Hotel tower will be handed over to Rotana Hotels & Resorts (RHR) with whom a profit sharing agreement has been signed; cash flows are expected to emanate from 2020. Rental income from the corporate block is expected to pay off its administrative expenses completely year-on-year. Going forward, leverage indicators are expected to trend upwards primarily on account of procurement of debt. Nonetheless, ICPL’s internal cash flow generation ability may support repayment of entire debt by that time.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or the undersigned (Ext: 207) at 021-35311861-71 or fax to 021-35311872-3.

Jamal Abbas Zaidi

Applicable Rating Criteria: Industrial Corporates (May 2016)

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 2018 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