VIS Places Ratings of Waves Singer Pakistan Limited on ‘Rating Watch-Developing’ Status

Business News English

Karachi, January 14, 2022 (PPI-OT): VIS Credit Rating Company Limited (VIS) has placed the entity ratings of ‘A/A-2’ (Single A/A-Two) assigned to Waves Singer Pakistan Limited (WSPL) on ‘Rating Watch-Developing’ status. The medium to long-term rating of ‘A’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Previous rating action was announced on September 08, 2021.

WSPL, the holding company, is principally engaged in retailing and trading of domestic consumer appliances and other light engineering products, besides the manufacturing and assembling of the same, and also owns real estate for potential development under its wholly owned subsidiary ‘Waves Builders and Developers (Pvt.) Limited (WBDL). The ratings take into account consolidated numbers of all group companies and incorporate that the marketing arrangements, having favourable impact on consolidated gross margins, will continue within the group companies.

The assigned ratings take into account strong brand recognition and considerable market penetration, particularly in the deep freezer, refrigerator and sewing machine categories. The ‘Rating Watch-Developing’ status reflects recent announcement by the company to demerge the manufacturing, assembly, and wholesale of domestic consumer appliances and other light engineering products business from WSPL and merge the same with and into Samin Textile Mills Limited (SMTM).

The transaction value is estimated at Rs. 8.2b, with purchase consideration comprising in the form of 2.0b in cash payable to WSPL, 199.72m shares of SMTM to be issued to WSPL, and 56.3m shares in a ratio of 20 additional shares of SMTM for every hundred shares WSPL held by shareholders of WSPL. The issuance of new shares of SMTM will take place after reduction of SMTM’s outstanding share capital from every 225 shares to 100 shares. Upon completion of scheme after seeking regulatory and stakeholders’ approvals, the name of WSPL will be changed to Waves Corporation Limited (WCL) and SMTM to Waves Home Appliances Limited (WHAL). Thereby, WCL will become the holding company of WHAL, WBDL, and Electronics Marketing Company (Pvt.) Limited.

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