The Pakistan Credit Rating Agency Limited
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Uswa Sikandar

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PACRA Maintains Entity Ratings of Maaksons Engineering Coorporation Limited

Rating Type Entity
(24-Aug-22 )
(24-Aug-21 )
Action Maintain Maintain
Long Term BBB+ BBB+
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Maaksons Engineering Corporation Limited (Maaksons) has been in the construction industry for many decades and has also recently ventured into real estate development projects. The company has three generations of the sponsoring family in the business and has two main offices – Lahore and Islamabad. The sponsors have a very good understanding of the business. The reporting and functional responsibilities are clearly demarcated. Maaksons has a no limit contract license. The Company has a track record with strong capabilities in executing turnkey projects. Maaksons is re – strategizing its business model and has built a portfolio of properties at diverse locations and is working on different projects to translate them into revenue streams. Maaksons approach is to reduce reliance on contractual business by developing owned properties for commercial and residential purposes at company and group level, with a view to ensure revenue sustainability in the future. Maaksons has formed an SPV to carry out its real estate development projects. One of such projects is nearing half way its completion while the other one is in its initial stages. The company has also constructed a building in Islamabad and is following a hybrid business model whereby its partial area is being sold on plan basis, while the remaining is being retained and operated on rental basis. Adjacent to this building, it has launched 2 new buildings with a JV Partner for similar purposes. Maaksons has redefined strategy of building assets, required for its operations as well as investment purpose, through surplus cash. Occasionally, funded facilities are also utilized to finance acquisition. Currently, the company is mildly leveraged, with a mix of funded and non-funded banking lines to facilitate its business.
The ratings incorporate inherent synergies and diversification in the group structure providing implicit strength to the business model. Going forward successful completion of contracts on time and strategy of building sustainable revenue stream through development of real estate properties remains pivotal for considerable growth. Good corporate governance practice is considered essential

About the Entity
Maaksons Engineering Corporation Limited, initially named as M. A Aleem Khan & Sons, was officially registered as a Company in 1984 but has been in business since 1951. Maaksons
scope of work comprises construction of roads and highways, bridges and structures, residential and commercial buildings, canals and tunnels, etc. The company is also committed towards development of its real estate ventures. Significant projects to the company’s credit are Signal Free Corridor Islamabad Highway and in DHA Lahore, Metro Lahore, 29 storey Telecom Tower Islamabad, Gulberg Green, 3x210 Thermal Power Station Muzaffargarh, Chashma Canal, etc. to name a few. BOD comprises six members, all of whom belong to the sponsoring family. Company’s ownership is also collectively divided among members of the sponsoring family.

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.