The Pakistan Credit Rating Agency Limited
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Muhammad Harris Ghaffar

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PACRA Assigns Initial Entity Ratings to Trans World Associates (Pvt.) Limited

Rating Type Entity
(02-Sep-22 )
Action Initial
Long Term A
Short Term A1
Outlook Stable
Rating Watch -

Trans World Associates (Pvt.) Limited (“the Company” or “TWA”) ratings reflect a strong business profile and sturdy presence in the telecommunication industry of Pakistan. The Company was a subsidiary of Orascom Investment Holding S.A.E (OIH), Egypt with 51% holding. In January 2022 OIH divested its shareholding to Orastar Limited, an existing shareholder of the Company. As of now, three companies operate under the umbrella of TWA which includes; (i) Trans World Enterprises Services (Pvt) Ltd (TES) (ii) Trans World Infrastructure Services (Pvt) Ltd (TIS) & (iii) TES Media (Pvt) Ltd(TMPL). There are only two companies in Pakistan having direct access to the submarine fiber optic cable network, PTCL and TWA. TWA is the only private telecom Tier-I operator (which is backed by owned and self- laid submarine cable network) in Pakistan which owns a 1,300 KM submarine cable system TW1and they are also a consortium member of the 20,000 KM fiber optic cable system SEA-ME-WE 5 with branch landing in Karachi. The core function of the Company is to provide internet bandwidth to Pakistan’s top cellular mobile operators, ISPs, corporate organizations and multiple small and medium enterprises as they are perfectly synchronized to the global Internet peering ecosystem via direct connectivity to content providers such as Google, Facebook, Amazon etc. All internet traffic in Pakistan comes through PTCL and TWA. TWA has built its reputation by providing reliable backhaul connectivity services to Pakistan’s leading ISPs and telecom operators. The board of TWA is more of an advisory nature as all members are well-experienced and possess technical expertise along with strapping industry- specific experience. BoD members take monthly briefings on the financial performance and expansion progress. The operations of the Company are augmented by a team of professionals and industry specialists. The Company has implemented a robust internal control system across the organization which is complemented by top-notch IT, business insight & intelligence, and financial reporting solutions. IPT (Internet Protocol Transit) lease is TWA’s prime product and the core strength of the Company lies in its after-sales support and quality service assurance. The Company is achieving diversification through their wholly owned subsidiary TES by providing (FTTH) and integrating vertically close-to-end consumers. TWA is also a consortium member in SEA-ME-WE 6 (under construction) which is set forth for sustainable future growth. The Company’s financial risk profile is considered adequate with comfortable coverages, cashflows and working capital cycle. Capital structure is moderately leveraged where borrowings are mainly comprised of long-term borrowings to support network and capacity expansion.
The ratings are dependent upon sustainability in Company’s revenue, margins, profitability and vigorous financial matrix. As the capital structure becomes leveraged, maintenance of sound financial discipline is imperative to hold.

About the Entity
TWA incorporated in Pakistan as a Pvt. ltd Company on October 01, 1980. Board consists of seven directors which include five non-executive and two executive directors. Mr. Iskander Shalaby is the CEO of the Company and acts as a nominee-nonexecutive director. Mr. Kamran Malik, the President of the Company, has a strong telecom industry profile and has been associated with Transworld group since 2004.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.