TPL Corp Limited | PP Sukuk | Jun-22

The rating reflects TPL Corp Limited’s (“TPL Corp” or “the Company”) diversified investment portfolio and its transition into a fully established holding company, with investments aligned to its strategic vision. Core subsidiaries continue to contribute to the group’s performance: TPL Trakker Ltd. (TPLT) offers customized digital mapping and tracking solutions; TPL Insurance Ltd. (TPLI), including Window Takaful operations, with future growth dependent on innovation, diversification, and adaptability; TPL Properties Ltd. (TPLP) redefined its business model by establishing a REIT Management Company (RMC) and investing in TPL REIT Fund I (proposed size: PKR 80 billion; raised: PKR 18.3 billion), which includes three key projects: The Mangrove, One Hoshang, and Technology Park. TPL Life Insurance Limited which got listed through a reverse merger with Dar Es Salaam Textile Mills Limited, continues to offer comprehensive life and health products, while TPL Security provides integrated security services, and TPL E-Ventures explores investment opportunities in startups and fintech. During the period, TPL E-venture written off its investment in Tilism Technologies (Telotalk). The primary sources of cash inflows for TPL Corp comprise: (i) dividend income from subsidiaries and associates, (ii) proceeds from the divestment of investments, and (iii) financial support from the sponsors. To meet financing requirements for its subsidiaries/associated companies and to settle inter-company balances TPL Corp raised debt through various financing arrangements. During 9MFY25, TPL Corp made the 1st principal payment of PPTFC and PP Sukuk and a commercial bank loan, amounting PKR 789mln; in addition, markup payments of three quarters amounting to PKR 641mln were made. To enable these payments, a loan of PKR 1.6bln was given by the parent company, TPL Holding. Since the quantum of upcoming interest and principal payment is sizeable, the reliance on sponsor support is still the key consideration. Dividend income or capital gains may take some time to reach to a size. The sponsors have committed to provide an additional loan to ensure the timely settlement of the upcoming installments. Lately TPL Corp, in partnership with Abhi (Pvt) Ltd, has successfully acquired FINCA Microfinance Bank, marking a major step in its expansion into the banking sector.
The ratings depend on the extent of perceived support from the parent organization. Projected performance of existing strategic investments remains essential for the Company to stand on its own footing and be able to repay the loans obtained from the sponsors, while meeting other obligations.

About the Entity
TPL Corp is a public listed company. TPL Corp is majorly owned by its parent company, TPL Holdings (Pvt.) Limited (~62%). Meanwhile, ~0.03% of shares of the Company are held by mutual funds. The Company has a free float of ~35% through local and foreign individuals. Mr. Ali Jameel, an established entrepreneur, is the CEO and is aided by a team of experienced professionals.

About the Instrument
TPL Corp have issued a PP Sukuk of ~PKR 2.19bln to contribute towards reprofiling existing debt and acquiring additional group company shares. PP Sukuk carries a markup of 3M KIBOR plus 2.25% per annum. Profit is being paid quarterly in arrears calculated on a 365 days year basis on the outstanding principal amount. TPL Corp has successfully paid 11th installment of markup amounting PKR 65mln in Mar25. The Company has paid a total markup of PKR 1,246mln till now. The semi-annual principal redemption payments have commenced from third year of the issue date in Dec24, comprising six equal installments of PKR 365mln each. The Company successfully disbursed the first installment in Dec24, and the remaining installments will continue on a semi-annual basis until the full redemption of the instrument at maturity. PP Sukuk is secured by 178.78mln shares of TPLP, 15.5mln shares of TPLT and 25.74mln units of TPL REIT and 33mln units of TPL Life Insurance.