20000228

KSE approves

Paramount Leasing

proposal to issue

Rs 250m TFCs

RECORDER REPORT

KARACHI: The Karachi Stock Exchange (KSE) has approved the prospectus of the Paramount Leasing Company to issue Rs 250 million worth of Terms Finance Certificate (TFC) soon.

According to the information gathered from the KSE, the issue of Paramount Leasing has a tenor of four years and consists of Rs 250 million of which Rs 200 million would be offered to institutional investors and Rs 50 million to the general public. The TFCs to be offered to the general public would be in sets of eight TFCs set each having an aggregate face value of Rs 5,000.

The profit to be paid to the investors would be 16.25 percent per annum, payable semi annually in arrears. The lead financial investors are Bank of Punjab, Pak Libya Holding Limited, PICIC, Metropolitan Bank, Gulf Commercial Bank, Habib Bank, Orix Investment Bank, Jahangir Siddiqi, Khadim Ali Shah Bukhari, etc.

As of June 30, 1999, the total assets of the company stood at Rs 747.63 million. These assets have been funded from 38.58 percent equity and 61.42 percent of debt. Out of total debt 63.86 percent represents mark-ups/interest bearing while the remaining debt represents non-mark-up/interest bearing. About 52.23 percent of non-mark up/interest debt assets are represented by lease key money.

The Paramount Leasing is envisaging to receive total rental of about Rs 334 million during 1999-2000, which comes to a monthly figure of around Rs 28 million. The company has received total rentals of Rs 282.8 million in 1998-99. During the six months from July 1, 1999 to December 31, 1999, it had received an average rental of Rs 24 million a month.

DCR-VIS credit rating agency has awarded has upgraded the company from BBB+ (triple B plus) to A- (A minus on August 27, 1999 while the short-term rating was maintained at D-1 (D one minus). The entity rating also recognised the ability of management to maintain financial performance during adverse economic environment of 1998-99 without further compromising on quality of assets.