PACRA Maintains Entity Ratings of Engro Corporation Limited

The ratings reflect Engro Corporation Limited's ('Engro Corp' or " the Company") strong risk profile and exceptional liquidity. The ratings incorporate established position of the Company as a conglomerate with a diverse pool of investments under four verticals: i) food and agriculture, ii) petrochemicals, iii) energy and related infrastructure, and iv) telecommunication infrastructure. The businesses under the Engro Corp's umbrella have maintained a steadfast growth trajectory, demonstrating the tenacity and strength of Engro Corp’s strategic approach. Engro Fertilizers achieved record-breaking urea production through efficient plant operations, resulting in the highest-ever urea sales. Engro Polymer & Chemicals maintained an impressive 89% market share despite construction slowdown, leveraging exports to ensure uninterrupted plant operations. Engro Enfrashare expanded its tower portfolio, emphasizing sustainable energy and growth opportunities. Engro Eximp FZE facilitated global trade. Sindh Engro Coal Mining Company (SECMC) also achieved significant milestones in mine expansion. Thar coal, post-expansion, promises to be the most cost-effective base load energy source. Engro Powergen Thar prioritized reliability, securing higher collections. Engro LNG terminal first of the two terminals of Pakistan handled 73 vessels and delivered 215 bcf re-gasified LNG to the SSGC network, accounting for 13% to 15% of the total gas supply in Pakistan.Engro Corporation is evaluating the proposed divestment of its thermal energy assets, including shareholding in Engro Powergen Qadirpur Limited, Engro Powergen Thar (Pvt.) Limited, and Sindh Engro Coal Mining Company Limited held via Engro Energy Limited, through a sale of shares process by a consortium lead by Liberty Power Holding Pvt. Limited. DH Corp & Engro Corp are collectively evaluating a scheme of arrangement pertaining to Engro Corp, as a part of this arrangement, shares held by Engro Corp shareholders will be transferred to DH Corp. In return, Transferred Shareholders will receive 2.24407865 DH Corp shares for each Engro Corp share, based on a specified formula. Consequently, Engro Corp will transform into a wholly owned subsidiary of DH Corp, which will be renamed as ‘Engro Holdings Limited’.
The Company continues to enjoy consistent dividend income from its subsidiaries. Engro Fertilizer announced substantially higher dividends. Enfrashare and Eximp received equity injection during the year while maintaining a low leveraged capital structure signifying its fortified financial risk profile. The ratings take into account HoldCo’s strong organizational structure, meticulously crafted to steer the strategic trajectory of its subsidiaries, alongside a resilient governance framework.
The ratings are dependent on the management's ability to execute its envisaged strategy of growth and expansion amidst prevailing economic environment. Sustainability in the performance of subsidiaries, stable dividends and effective management of financial profile is important.

About the Entity
Engro Corporation Limited is a public listed company. The principal activity of the Company is to manage investments in subsidiaries, associates and joint ventures. Dawood Group holds ~49.05% stake in Engro Corp, through Dawood Hercules Corporation Limited (~39.9%), related corporate entities (~2.90%), and individuals of Dawood family (~6.18%). Mr. Hussain Dawood chairs the Board of Directors, whereas Mr. Ahsan Zafar is the President and CEO of the Company.