PACRA Maintains Entity Ratings of Pakistan Services Limited

Pakistan Services Limited (PSL) is the owner and operator of Pearl Continental (PC) Hotels in Pakistan. PC is the premium five star hotel chain of the country. The rating reflects the leading position of the PC brand in the domestic market alongwith a diversified geographical presence of its hotels, providing competitive edge over other players. PSL currently has presence in six major cities. The rating incorporates association of PSL with Hashoo group – leader in the domestic hospitality market with over 2500 rooms in 20 properties. PSL has observed continuous growth in Occupancies and Average Daily Rates – facet of improved security situation and increased economic activity in the country. PC – Lahore is the biggest hotel with 600+ rooms contributing ~45% to the overall revenue stream. The company currently has a low leveraged capital structure but debt driven expansions would increase the company’s leveraging though remaining at a comfortable level.

In order to capitalize on the increasing demand in the hospitality sector, PSL targets sizeable investments in expansion and development of new properties in both high-end and mid-tier segments. The company also plans to enter into the real estate housing and mega mall projects through its subsidiaries. Management of coverages amidst rising debt levels would remain crucial. Timely completion of under construction properties improving the cashflow stream would provide support to the coverages.

About the Entity
Pakistan Services Limited was established in 1958 and it is quoted on Pakistan Stock Exchange. It owns and operates chain of hotels and resorts under the brand name Pearl Continental Hotels – largest hotel chain of the country with 1,526 rooms. Hashoo Group directly & through its affiliates has 89.15% control of the company. Hashoo group is one of the leading business conglomerate of Pakistan with significant presence in Hospitality, Oil & Gas and other sectors.

Pakistan Services Limited has a nine member BoD, out of which eight are nominated by Hashoo Group and it has one independent member. Mr. Sadruddin Hashwani – founder of the Hashoo Group – chairs the board. He has experience of over 5 decades of managing different businesses. Mr. Murtaza Hashwani is the Chief Executive Officer of the company. He is assisted by an able team of experienced professionals. Each hotel has its own management team headed by General Manager who reports directly to the vice president operations.