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The Pakistan Credit Rating Agency Limited

Date
18-Feb-2017
Analysts
Mahina Majid
mahina.majid@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Rating Modifiers | Outlook and Rating Watch (Jun 16) [View]
  • Correlation between Long-term and Short-term rating (Jun 16) [View]

Related Research

  • Sector Study | Tracking Services (Feb 16) [View]
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PACRA Maintains Entity and Instrument Ratings of TPL Trakker Limited; Rating Watch Intact
 Rating Type Entity Debt Instrument
Current
(18-Feb-2017)
Current
(18-Feb-2017)
 Action Maintain Maintain
 Long Term A- A+
 Short Term A2
 Outlook Stable Stable
 Rating Watch RatingWatch - RatingWatch -

The ratings incorporate TPL's leadership position in tracking industry, emanating from its diverse product portfolio and superior technology infrastructure. The company is targeting tracking business in niche market in the personal tracking solutions and is also poised to expand geographically. Sustainability, from incremental cash flows from core operations, going forward, remains important for coverages which are currently subdued to some extent. After the acquisition of TPL Life (Previously: Asia Care Health and Life Insurance Company Limited), whole organization structure has been revamped along with a new firm strategy; encompassing innovation in its products and introducing mass retail channel targeting lower income segments. The rating watch captures the ongoing corporate restructuring of the company; TPL Trakker being restructured into a holding company, and renamed to “TPL Corp”. The two major segments would be demerged into wholly owned subsidiaries, i) TPL Vehicle Tracking (TPLV), and ii) TPL Maps (TPL M), along with these two investments TPL Corp would entail investment in TPL Properties, TPL Direct Insurance, TPL Securities Services, and Trakker Middle East.
The ratings are dependent upon the corporate restructuring; new status of the company and its financial strength. The ratings are reliant on the company's ability to sustain its market share and technological edge in the industry. Adherence to good financial discipline while strengthening debt servicing capacity through improving cash position is vital.
About the Entity
TPL Trakker Limited (TPL), listed on PSE, is Pakistan's largest vehicle tracking and fleet management company operating with a network of 9 branches, catering to 150,000 customers’ tracking needs. TPL is majority (53%) owned by TPL Holdings (Pvt) Limited (THL), which, in turn, is equally owned by Ali Jameel and Ali Bhai families. Digicore divested its whole stake during the years (Jun’15: 5%). The rest is dispersed ownership. THL has other direct investments in general and life insurance, real estate, security services, energy and financial services sectors.
The Board consists of eight directors, including CEO; six are representatives of THL and two are independent. Mr. Ali Jameel, a Chartered Accountant from England & Wales, is the CEO of TPL Trakker. He has diversified experience in managing various business ventures. He is supported by an able team.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.
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