PPI Original Text (PPI-OT) – Pakistan Credit Rating Agency Limited Reaffirms Ratings of Worldcall Telecom Limited

Lahore, May 25, 2012 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the long-term and short-term entity ratings of Wordcall Telecom Limited (WTL) at “BB+” (Double B Plus) and “A3″ (A Three) respectively. The rating of the secured TFC issue of PKR 4,000mln has also been reaffirmed at “BB+” (Double B Plus). Meanwhile, the ratings remain under Rating Watch.

The ratings reflect WTL’s stressed financial profile emanating from inadequate operational cash flows to meet its obligations. The company is managing its finances mainly though extending supplier credit. The ratings draw material comfort from WTL’s association with Omantel – the parent.

The sponsor, while reaffirming the intent to maintain majority shareholding in WTL, has assured support for WTL’s business plan. However, delays by the sponsor in monetizing its commitment to support, resulting in deferment of the company’s expansion plans, have put the company’s business profile under pressure. This has compromised the market positioning of the company in a highly competitive telecom industry.

The Negative Outlook captures the uncertainty in the materialization of critical deliverables related to the company’s business plan. Thus, timely implementation of the International Clearing House (ICH) Agreement (likely to support WTL’s LDI business) and recurring cash flows from high margin projects would remain important. At the same time, flow of funds from the parent would remain imperative in aiding WTL to meet its financial obligations and satisfying its Capex requirements, mainly aimed at data business.

For more information, contact:
Hammad Rashid
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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