Press Release

VIS Assigns Initial Ratings to Clover Pakistan Limited

Karachi, June 19, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-2’ (A Minus / A Two) to Clover Pakistan Limited (Clover). The long term rating of ‘A-’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings is ‘Stable’.

Clover belongs to a business conglomerate having presence in various businesses encompassing oil terminals, oil storage & handling equipment, oil marketing, food, technology & financial services with well renowned local and foreign associated companies. During the year, an associated company, Hascombe Business Solutions (Pvt) Limited (HBSL-owner of the brand name ‘Gestetner’) was merged into Clover after sanction of the High Court. Clover currently operates in three business segments which are (i) Business Solutions/Petrotech (Energy industry/office equipment sales & and services along with e-commerce development) (ii) lubricants and Auto care accessories marketing & distribution, and (iii) packaged foods distribution.

Assigned ratings incorporate strong sponsor profile, track record of professional Board & management and diversification in high margin businesses. Nonetheless, ratings are constrained by business risk factors which are evident of growth stage of the entity. Clover has recently initiated its food, lubricant marketing & car care accessories business while Business Solutions/Petrotech business has been operational for a considerable time.

During 9M2019, net sales posted a significant growth in margins after the merger with HBSL; this resulted in a positive bottom line for the company in the period ending March 2019. Current profitability of the business supports its cash flow management. Clover maintains an adequate liquidity profile through its working capital management and currently has no debt on its books keeping its leverage indicators at a sound level. Ratings will be contingent on maintenance of its business risk profile, sustainable performance metrics and current leverage indicators.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Ms. Muniba Khan (Ext: 214) at 021-35311861-71 or fax to 021-35311872-3.

Javed Callea

Applicable Rating Criteria: Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited