Press Release

VIS Assigns Entity Ratings to Vision Developers (Private) Limited

Karachi, December 17, 2019: VIS Credit Rating Company Limited has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Vision Developers (Private) Limited (VDPL). Long term entity rating of ‘A-’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-2’ indicates good certainty of timely payment, sound liquidity factors and company fundamentals. Access to capital markets is good. Outlook on the assigned ratings is ‘Stable’.

VDPL is a part of Vision Group of Companies that deals in real estate projects in Pakistan and is owned largely by Mr. Aleem Khan, a prominent businessman and politician. The Company is in the process of development of “Park View Villas” (PVV) project on main Multan Road Lahore 3 km from Thokar Niaz Baig Motorway Interchange, and 10km before Bahria Town Lahore. PVV is a housing scheme targeting the middle and upper middle class segment of the society. Total planned area for the project is estimated at 15,282 Kanal, out of which 4,500 Kanal has already been acquired, infrastructure development work on which is under progress. Total saleable area is expected to clock in around one half of the available space. PVV was launched in June 2010 and till end-October’ 2019, the company has sold residential and commercial plots accumulating to 42% of the saleable area.

The assigned ratings to VDPL reflect moderate business risk and adequate financial profile of the company. Assessment of business risk profile take into account strong brand name developed over the years, within the city location of the project, security features and amenities on offer. Financial risk profile incorporates healthy margins and sufficient cash flows to service outstanding debt obligations. The Company is in the process of further land acquisition. Post-acquisition, VDPL projects sales revenue to witness significant growth over the rating horizon. Consequently, in view of future projected revenue from sales of additional plots, profitability is expected to improve, going forward. Given elevated debt levels, leverage and gearing indicators were reported on the higher side at end-June’19. However, the same is projected to decline going forward in view of debt repayments and projected increase in equity base. Timely completion of key milestone without any significant cost and time overruns while maintaining healthy sales velocity and collection efficiency, as projected, will remain critical to avoid cash flow mismatches and will be the key rating sensitivities, going forward. Ratings remain dependent on maintaining sound debt servicing ability and undertaking planned improvements in corporate governance framework.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Mr. Jamal Abbas Zaidi (Ext: 207) at 35311861-70 (10 lines) or fax to 35311873.

Javed Callea

Applicable Rating Criteria: Industrial Corporates - 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 .

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