Press Release

VIS Reaffirms Ratings of Swat Expressway Planning Construction and Operations (Private) Limited

Karachi, June 26, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Swat Expressway Planning Construction and Operations (Private) Limited (SEPCO) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors. Moreover, the risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamental and liquidity factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on April 25, 2018.

The ratings assigned to SEPCO take into account strong sponsorship profile of the two shareholders of SEPCO. Shareholding of SEPCO is vested with Frontier Works Organization (FWO) (Class A shares) and Pakhtunkhwa Highways Authority (PKHA) (Class B shares). Major stakeholders, PKHA and FWO have sizable experience in infrastructure projects. FWO has undertaken major projects under public private partnership and Build-Operate-Transfer (BOT) mandates. The ratings draw comfort from precise financial planning and execution resulting in avoidance of cost overruns. However, the ratings are constrained by absence of parent company guarantee and sponsor support agreement between SEPCO and the sponsor (FWO). Completion of Expressway by May 31, 2019 has not been achieved primarily due to non-availability of complete Concession Area and delay in shifting of utilities, however adequate arrangements have been provided to facilitate commuters’ journey from Kernel Sher Khan Interchange to Chackdara Interchange. Therefore, the construction and implementation risks are largely addressed.

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

Javed Callea

Applicable rating criterion: Corporates (May 2019)

Toll Roads Rating (November 2018)

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 .

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