The Pakistan Credit Rating Agency Limited (PACRA) has assigned a final rating of "AA" (Double A) [Preliminary; AA] to the proposed and secured Sukuk of Rs 6,900 million (including green shoe option of Rs 2,100 million) by Pakistan Mobile Communications Limited (Mobilink). This rating denotes a very low expectation of credit risk.
The rating reflects PMCL's sound business profile. The company, with largest operational network and a stable share in country's subscriber base, maintains leading market position. PMCL has fared well against increasing relative competitiveness of few of the peers.
The company has optimised its technological infrastructure, limiting additional CAPEX requirements for existing operational scale. This has benefited PMCL's financial profile, as free cash flows are being directed to reduce debt obligations. PMCL has outsourced maintenance of its operational network. Although this is likely to positively benefit margins, managing the impact, if any, on quality of services and control environment would be important. PMCL has acquired 3G license. This being debt funded has pushed up the leveraging, which is expected to rationalise along repayments.-PR