The Pakistan Credit Rating Agency Limited
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Saadat Mirza

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PACRA Maintains Entity Ratings of Maaksons Engineering Corporation Limited

Rating Type Entity
(24-Aug-21 )
(25-Aug-20 )
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. 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 which are diverse and furnish different propositions to translate them into revenue streams. Going forward Maakson's 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 will follow a hybrid business model whereby partial area will be sold on plan basis, while the remaining will be retained and operated on rental basis. 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 adequately leveraged, has a mix of funded and non-funded banking lines to facilitate its business.
The ratings incorporates inherent synergies and diversification in the group structure providing implicit strength to the business model. Going forward successfully completion of contracts on time and envisaged strategy of sustainable revenue stream for development of properties remains pivotal for considerable growth. Good corporate governance practice is considered essential.

About the Entity
Maaksosn Engineering Corporation Limited, initially named as M. A Aleem Khan & Sons, 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. Significant projects to its 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. It is currently focused on a few major projects in Lahore including, a multipurpose complex - Panta Square and a housing society - Prism 9. BOD comprises nine members, all of whom belong to the sponsoring family. They collectively have complete ownership of the company.

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.