PACRA Maintains the Rating of TPL Trakker Limited | Sukuk

TPL Trakker Limited (or the "Company") is in the business of providing superior quality GPS, GSM & Satellite Mobile Asset Tracking Management, and Information Solutions. The assigned rating takes into account the Company’s prominent position in Pakistan’s tracking industry, emanating from its multifaceted product portfolio and sanguine technology infrastructure. As diversity becomes inevitable to sustain in its operating segment, the Company is gradually shifting toward business avenues that are more beneficial for the Company’s growth. The new segments have already achieved above-par results, however, incremental yet consistent cash flows remain pivotal. With a niche service area like Digital Mapping and location services, the Company is focused on innovations, partnerships, product development, and direct business development – both in B2B and B2G, to drive stable and sustainable growth for the rest of the year. During the period-end on Sep'23, the Company reported a topline of PKR ~0.679bln (Sep'22: PKR ~0.532bln). The profit of the Company increased to PKR ~0.072bln in Sep'23 whereas in Sep'22, it stood at a loss of (~0.031)bln.
The ratings are dependent upon the strength of the underlying security of the instrument. The instrument is secured through a tiered security structure. In addition to this, specific comfort to the assigned ratings is being drawn from the inclusion of a pre-default mechanism, comprising a facility payment account and facility service reserve account in which one installment will be maintained

About the Entity
TPL Trakker Limited (TPLT) – is a publicly listed Company that is majorly (64.32%) owned by TPL Corp Limited. TPLT is a telematics solution provider and the core business mainly comprises vehicle tracking, fleet management, Internet of Things (IoT), and Digital mapping services. BoD of the Company comprises eight members, headed by the Chairman Mr. Jameel Yusuf. Mr. Rao Salman is the CEO of the Company, having more than a decade of experience, and has joined TPL Trakker Limited on August 15 2023.

About the Instrument
TPL Trakker Limited has issued a secured, OTC-listed, and privately placed Sukuk of the amount PKR 1.25bln in March 2021. The instrument carried a profit rate of 3MK+300bps with a tenor of five (5) years (inclusive of a 6-month grace period). The purpose of the Sukuk is to meet the Company's working capital requirement, investment in group companies, and partial debt repayment. The capital structure of the instrument consists of a Pari passu hypothecation charge a facility Payment Account (FPA) maintained with the bank which is being built up monthly with 1/3rd of the installment (Principal+ Interest) by the 25th such that the entire upcoming installment is deposited in the FPA three days prior to the upcoming installment date, and a Facility Reserve Account (FSRA) maintained with the account bank in which one installment (Principal+ Interest) maintained throughout the tenure of the instrument. As per client representation, the exact amount is maintained in both FPA and FRSA accounts. Sukuk will be redeemed after eighteen (18) equal quarterly payments in March 2026. Currently, the principal of PKR ~69.4mln and markup of PKR ~52.34mln has been paid at the end of Jun'23 and PKR ~69.4mln and markup of PKR ~49.89mln has been paid at the end of Sep'23.