According to a statement of JCR-VIS on Thursday, SLCL's asset quality remains strong and leverage is low allowing significant room for further growth.
However, portfolio growth tapered off during 2005 after posting notable growth in the previous year. This year's prospects appear promising and JCR-VIS will follow developments in terms of diversifying the business portfolio in terms of clientele as well as markets served on an ongoing basis.
About the CGR-9 rating to PKIC, statement said these ratings are based on a scale ranging from CGR-1 (lowest) to CGR-10 (highest). The assigned rating donates a very high-level of corporate governance.
The reaffirmation of the rating assigned to PKIC is a positive reflection on the conscious effort of both board of directors and the executive management towards good corporate governance.
JCR-VIS Credit Rating Company Ltd has placed the medium to long-term rating of A to the TFC issue of Rs 2400 million of Telecard Ltd on rating watch.
This follows a request by the private sector wireless local loop operators to the government of Pakistan for deferral of the balance 50 percent payment on account of wireless local loop licence and frequently spectrum fee for the period of at least four years.
The deferral has been requested on the basis that a similar allowance has already been given to the mobile service providers. The management of Telecards is confident that the requested relaxation will be granted. However, a formal response from the government is still awaited in this regard.
Pending a final decision, Telecard has not yet deposited the balance amount even though it has raised the necessary financing through the subject TFC issue and the funds earmarked for this purpose are currently lying unutilised.
Although if granted this exemption will have a beneficial impact on the future cash flows of the company. JCR-VIS will have to balance this against the dilution of the key credit enhancing security underlying the TFC issue ie the assignment of the licence pertaining to local loop operations and frequency spectrum of Telecard.
The exact impact will become known once the formal response from the government to the local loop operator's request has been received. In case the response is in their favour, as expected by Telecard's management, it will then have to approach the FTC holders for approval to changes in the security structure of TFC issue.
JCR-VIS will continue to monitor developments in this regard and will inform the public when any further rating action is warranted.