Lahore, September 27, 2021 (PPI-OT):The ratings reflect adequate financial profile of First Fidelity Leasing Modaraba (FFLM) supported by its debt free structure. However, subsequent benefits have been limited as significant portion of the asset structure is invested in non-earning/illiquid assets i.e. investment property – Enplan (Private) Limited. The Modaraba has posted a marginally improved YoY performance for period ending March 2021. FFLM has an earning book mainly deployed in a portfolio of machinery and vehicles.

Meanwhile, the management is making continuous and rigorous efforts to liquidate its exposure in “Enplan”; and they expect an amicable resolution. Concerns regarding another illiquid investment property – Murree Villas, are further expected to be resolved. The Modaraba is yet to develop a sustainable business model although the debt-free structure provides comfort to the rating. Governance structure needs to be enhanced while the core business base needs to be enhanced going forward.

The ratings are dependent on the management’s ability to envisage a business plan for the Modaraba. Timely liquidation of investment in “Enplan” is important to bring viability to the Modaraba. The management is making continuous efforts. Meanwhile, any debt acquisition should be considered carefully.

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