November 6, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained the entity ratings of ORIX Modaraba at ‘AA’ for long term and ‘A1+’ for short term, with a ‘stable’ outlook forecast.
According to the rating agency, the ratings are dependent on the management's ability to sustain its strong financial profile while ensuring stable profitability.
“ORIX Modaraba (ORIXM) enjoys sound financial profile emanating from leveraging, managed liquidity, and sustained profitability” the press release said.
Moreover, good management quality, strong risk management systems and control environment provide strength to ORIXM's profile.
The management's business strategy envisages volumetric growth in assets to improve its performance trends. With this, the dip in profitability is planned to be recovered, the report added.
The expected growth would be funded through mix of internal sources and debt. However, the management expects to maintain the leveraging pattern at a comfortable level.
“The Modaraba's affiliation with ORIX Leasing Pakistan Limited helps in further strengthening the risk management, providing established outreach and experience of parent, particularly in SME segment, which the management of Modaraba has identified as key growth driver.”
ORIX Modaraba, is a perpetual, multipurpose Modaraba, listed on the Pakistan Stock Exchange. ORIX Leasing Pakistan Limited (OLP) has 100% stake in Modaraba’s management company – ORIX Services Pakistan Limited (OSPL) – and 20% stake (direct and indirect) in ORIX Modaraba ORIXM.
It is primarily engaged in financing of plant, machinery and vehicles. The parent company, OLP – 50% owned subsidiary of ORIX Corporation – Japan and rated “AA+” (Double A Plus) by PACRA is the biggest leasing company of Pakistan and has a network of 31 branches across the country at end-Dec17.
