PACRA Assigns Initial Ratings to Daewoo Pakistan Express Bus Service Limited| PPSTS-II| PKR 4.0bln | Mar-26

Daewoo Pakistan Express Bus Service Limited (“DPEBSL” or “the Company”) has issued its Second-Rated, Secured, Privately Placed, Short-Term Sukuk-II of PKR 4,000 million on March 2nd, 2026 (inclusive of a Green Shoe Option of up to PKR 2,000 million), marking a strategic financial move for the Company. The underlying instrument is secured by a ranking charge over the Company’s current assets, including receivables, with 25% margin. To ensure repayment discipline, the Issuer shall maintain and efficiently manage Debt Payment Account (“DPA”) under lien of Investment Agent whereby the first payment equivalent to PKR 1,000 million shall be made on or before 21 days before the maturity date, second payment on or before 15 days, third payment on or before 7 days, and last fourth payment on or before 2 days before the maturity of the Issue. Such that the amount equivalent to the full issue is available in the DPA 02 days before the maturity date. DPEBSL, established in 1997, is a leading intercity transport and logistics operator in Pakistan, managing over 400 buses, 200 cargo trucks, and 200+ delivery centres. The Company has expanded into regulated public sector mass transit projects, including Lahore Feeder, Multan Metro, Orange Line Lahore, BRT Peshawar, and BRT Karachi, capturing ~70% market share, and recently launched the Daewoo Waste Management Division under the “Suthra Punjab Initiative,” covering 22 tehsils with AI-based monitoring and KPI-linked operations. The rating is supported by stable ownership and governance, professional management, and robust internal controls. The company has three of its already established and historical business lines: intercity, intracity, and cargo. It has added the fourth one lately – the waste management. Hence, DPEBSL has a well-diversified revenue base. The company achieved growth (~79% in CY25 to PKR 46,728 million) across intercity (27.5%), intracity (26.4%), Daewoo Waste Management Division (40.6%), and cargo services (5.5%). The leveraged capital structure is primarily due to long-term CAPEX financing and short-term financing for working capital requirements, especially for waste management.
The ratings are contingent on the Company’s ability to sustain its revenue growth while maintaining a healthy profitability matrix. Adherence to strong financial discipline and ensuring that leverage remains at a manageable level shall also remain imperative for the sustainability of the ratings. Furthermore, a gradual reduction in receivables from PWMC shall remain important.

About the Entity
DPEBSL, incorporated in 1997, operates passenger, cargo, and mass transit services in Pakistan, with 95.47% owned by Liberty Daharki Power Ltd., ultimately owned by Mr. Shaheryar Arshad Chishty.

About the Instrument
The PPSTS-II carries a profit rate of 6MK+2.50% and has a tenor of six (6) months, and will be redeemed in bullet at the expiry of the tenor. The profit will be paid at maturity. Currently, Daewoo’s PPSTS-I PKR 2,000 million has been fully subscribed and will be redeemed in due course of time.