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PACRA Maintains Entity Ratings of Nishat Hotels and Properties Limited

June 28, 2019

Lahore, June 28, 2019 (PPI-OT): Nishat Group, through Nishat Hotels and Properties Limited, has set up a project comprising a state of the art shopping mall, a luxury hotel and banquet halls. The ratings reflect the Company’s association with Nishat Group, one of the leading business conglomerates of Pakistan, and expected group support. With the mall operating at full capacity, the Company’s main focus is now on increasing occupancy rates from hotel operations.

Here, expansion and change in management are expected to have positive results. Although the Company maintains profitable operations, it has yet to completely turn around and generate a positive bottom-line. Financial profile remains stretched due to high leveraging, large repayments and weak coverages. Adequate financing facilities provide some cushion to meet payments in a timely manner. Increase in borrowings and rising interest rates would further suppress coverages, exerting pressure on the Company. Ratings take comfort from demonstrated group support.

Increasing cashflows from hotel operations and operating the mall at optimal capacity are imperative. Timely arrangement of financing to repay obligations is crucial. Any significant deterioration in this and/or margins leading to lower cashflows will have a negative impact on ratings. Meanwhile, given sizable leveraging and debt obligations, group support remains critical for the ratings.

For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425

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