The Pakistan Credit Rating Agency (Pacra) has assigned a rating of "AA-"(Double A minus) to the proposed secured Term Finance Certificate (TFC) issue of Rs 3,000 million by Worldcall Telecom Limited (WTL).
The rating denotes a very strong capacity of timely payment of financial commitments. Meanwhile, the rating is placed on RatingWatch, pending the completion of acquisition of majority stake in WTL by Oman Telecom (OT).
The rating reflects WTL's sound financial profile emanating from its low leveraged capital structure. However, the company is exposed to a relatively high level of business risk fuelled by increasing competition in its areas of operations. This, while making it difficult to achieve business expansion, has also put pressure on margins, in turn, affecting WTL's cash flows, which though currently are robust.
However, the company is expected to be a well placed to manage these risks subsequent to transfer of majority ownership to OT. OT, the largest communication service provider in the Sultanate Oman and possessing robust financial health and technical capacity, is expected to design and implement a more market-oriented business strategy in due course. Nevertheless, any extended delays in acquisition by OT of majority stake in WTL would have negative implications for the rating.-PR