Karachi, July 19, 2021 (PPI-OT):VIS Credit Rating Company Ltd. (VIS) has maintained the entity ratings of International Complex Projects Limited (ICPL) at ‘AA/A-1’ (Double A/ A-One). Outlook on the assigned ratings has been revised from ‘Stable’ to ‘Rating Watch-Developing’ in view of proposed restructuring and demerging of ICPL into three undertakings i.e. ICPL Demerged undertaking 1, ICPL Demerged undertaking 2 and ICPL Retained undertaking (as surviving entity). Upon finalization of the scheme with regulatory approvals, ratings will be reviewed. Previous rating action was announced on March 13, 2020.

Assigned ratings continue to factor in ICPL’s strong sponsor (Dolmen Group) strength, established market position and long-standing in the real-estate sector. The group is a well-reputed real estate developer with major projects comprising Dolmen Mall Clifton, Harbour Front, Executive Tower and the recently completed project Twin Towers (Tower A and B). Ratings also take into account company’s strong capitalization levels and sound debt servicing ability given cash inflows from sale of floors of Tower A, healthy growth in rental proceeds post completion of Twin Towers and recurring dividend income (from Dolmen City REIT – DCR) are expected to remain adequate.

ICPL (on behalf of Dolmen Group) entered into an agreement with DHA Lahore in 2019 to construct a commercial complex/ mall in Lahore under a new subsidiary, DHA Dolmen Lahore (Private) Limited (DDL). As per agreement, 74% shareholding of DDL is vested in Dolmen Group while remaining is held by DHA Lahore; profit sharing will be based on same proportion. Total expected construction cost is Rs. 22b (excluding the land cost of Rs. 5b as provided by DHA Lahore); three-fourth of which is planned to be funded by the Dolmen Group while remaining will be arranged through borrowings on DDL’s books. At end-Feb’21, ICPL’s investment in DDL reached to Rs. 3.8b (Dec’19: Rs. 316.3m) which was financed through debt.

In FY20 and in the ongoing year, despite rent concessions provided on account of Covid-19, recurring dividends from DCR have remained stable. While leverage ratios are expected to remain elevated over the rating horizon due to additional debt planned to be undertaken for DDL project, the revenues projected from the same are well matched with related debt repayments keeping the DSCR at manageable levels.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/