Press Release

VIS Reaffirms Entity Ratings of Cyan Limited

Karachi, December 31, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Cyan Limited (CL) at ‘A/A-1’ (Single A/A-One). The long-term rating signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-1’ depicts high certainty of timely payment where liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on January 2, 2019.

Assigned ratings of Cyan Limited (CL) derive strength from an element of sponsor support, given the presence of Dawood Hercules Group as the major sponsor. The sponsoring group is a prominent industrial conglomerate having presence across diversified sectors. Ratings also reflect an adequate corporate governance infrastructure, as is mandatory for listed companies, and the presence of a qualified and experienced management team.

CL is principally engaged in investment in public equities market, with an objective to pursue active returns. Given the adverse stock market performance, CL’s profitability has been affected. Nevertheless, in terms of investment performance, CL has outperformed asset class returns during the period under review. CL’s bottom-line has remained negative during the period under review, and as a result, the company’s equity has trended down to Rs.1.8b as of Sep’19.

Other than managing a portfolio of marketable securities, CL also operates in other lines of business i.e; strategic advisory services and equity investing in private companies. Recently the company has obtained the consultant to the issue license to undertake consultancy services for public and private issues/mandates as well. So far, advisory income has been limited. Going forward, management believes income from advisory and consultancy services is expected to increase. This diversification in company’s revenue base would support the revenue stream of the company.

CL’s operations are entirely equity funded, with short term borrowings being seldom used for potential trading opportunities, as and when they arise. Going forward ratings would take into account the alignment of dividend payments with current earnings. Given the absence of debt, capitalization of the company is considered adequate.

For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 214) or the undersigned (Ext: 201) at 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Non-Bank Financial Companies (October 2017)

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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