Lahore, May 11, 2023 (PPI-OT): Abhi (Pvt.) Limited (the "Company") has emerged into the country's fintech space with a financial wellness platform for individuals and companies. Abhi has raised ~$21mln from renowned venture capital funds and the co-founder's own investment. The product line of Abhi includes invoice factoring, which is currently a prime revenue earner, along with EWA and payroll financing products.
Further, Abhi only allows the EWA facility to employees of pre-qualified customers, and concentration risk has been addressed through having a cap of 5% of net equity and sub-ordinated debt for cumulative exposure of all product lines to a single customer. Abhi's total credit exposure stood at ~PKR 4,607mln at end-Jun'22, and going forward Abhi will ensure that the cap of single product-line exposure and sector exposure to 70% and 20% of net-equity and subordinated debt, respectively, is maintained. Further, total credit exposure will be kept under 2x of equity.
In order to manage the working capital needs, the Company is in the process of issuing a short term sukuk amounting PKR 2bln. The security structure of the Sukuk would be secured by way of i) charge/lien of collection account: The Company's customers deposit their repayments into the Faysal Bank Account.
The Company shall issue irrevocable instructions to Faysal Bank to transfer funds equivalent to 1/6th of the Sukuk repayment amount from the Faysal Bank account, on a monthly basis to the Sukuk Payment Account (SPA) maintained with the Faysal Bank ii) lien marked on and a right of set-off, on SPA iii) registered lien in favour of the trustee, over short-term liquid investments amounting to PKR 1bln (in NBP Islamic Income Fund and at Habib Metropolitan Bank amounting PKR 500each), these funds would be earmarked in favour of Debt Service Repayment Accounts maintained with the Habib Metro Bank and NBP Islamic Income Fund, until maturity for the benefit of the investors iv) hypothecation over the present and future receivables of Abhi (Pvt) Limited would be created in favour of the trustee and iv) Fifty percent (50%) of the issue size shall be available for deployment from the day of the issue, while remaining 50% shall be placed in a Bank(s) or money market fund(s) rated AAA or AA+. The remaining 50% would be gradually available for deployment, in proportion to the retention of funds in the DPA. Proportionate to the amount held in DPA, an equivalent amount from the cash fund can be utilized for deployment in business.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com