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PACRA Assigns Initial Entity Ratings To Imperium Hospitality (Private) Limited

Rating Type Entity
(13-Mar-23 )
Action Initial
Long Term BBB
Short Term A2
Outlook Stable
Rating Watch -

Imperium Hospitality (Private) Limited ('IHPL’ or 'the Company') is principally committed towards the development of real estate ventures. Presently, the Company is solely involved in its first high rise real estate project, namely Imperium Tower. IHPL aims to pioneer a state-of-the-art corporate tower facility that is expected to become a landmark in the Lahore’s skyline. The ratings reflect Company’s emerging position in real estate sector of Pakistan underpinned by good sponsor’s profile – Monnoo Group of Industries. The group holds long-lived presence in diversified sectors of economy including textile, real estate, power, & agriculture. Considering current macroeconomic challenges; inflationary pressure, hiked interest rates, & rising cost of materials specifically steel and cement have led to a slowdown in the real estate industry. However, the government has taken several initiatives to boost the real estate sector, like the introduction of tax incentives, infrastructure development, & the establishment of regulatory bodies to oversee the sector. During 2019, IHPL successfully commenced prime activities of tower, thus far, the grey structure has been completed up to ~100pc. IHPL intends to ensure project completion by end of 2023. As the tower's construction has been a significant investment for the Company, requiring substantial financial resources, expertise, & project management skills. From start of the project to execution and managing; IHPL has outsourced a qualified team of professionals, comprised of design development company, architecture firm, independent project managers, construction consultants, & contractors to secure smooth flow of operations and timely completion. Imperium Tower is constructed on ~33,795 square feet of land and features two divisions structurally, Block A & Block B. IHPL holds an agreement to sell Block A to M/S Fauji Fertilizer Company Limited – FFC. The Company has received major disbursements from FFC in tranches with every target milestone achieved of the project, whilst remaining minor portion shall be settled upon completion of tower. However, Block B of tower will remain the property of the Company and shall be utilized for rental purposes. Going forward, the cash flows requirement for the development and construction expenditure of project is mainly planned to be met through direct support from Sponsors and working capital lines availed from bank. Financial risk profile of the Company is demonstrated by its leveraging position which stood at 66% by end Jun-22.
The ratings are dependent on the IHPL’s capacity to repay its borrowings through successful operations of tower. Timely completion of project milestones without any significant cost overruns and maintenance of projected rental revenue figure and collection efficiency will remain critical post completion of tower activities.

About the Entity
Imperium Hospitality (Pvt.) Limited ('IHPL' or ‘the Company’) is a private limited concern incorporated in 2016. During 2019, the Company started its first real estate project with the name of Imperium Tower. It is currently involved in the construction of perfectly designed corporate tower comprising of 4 levels of basement, ground plus 18 floors, offering lettable corporate office spaces in commercial precinct of Gulberg, Lahore. The ownership of the Company majorly lies with Kaisar Shahzada (Pvt.) Limited (~99.998%) whereas, remaining minor stake (~0.002) resides equally with Mr. Sheraz Jehangir, Mr. Danish Kaisar, & Mr. Shahbaz Alam. Mr. Sheraz Jehangir (MD & CEO) is a seasoned business professional & holds 20+ years of experience. He is assisted by qualified team of professions.

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.