Simah Rating Agency assigns initial unsolicited national scale entity ratings to Mayar Holding Company

Zawya

13-03-2025

Riyadh: Tassnief has assigned initial long-term entity rating of '(BB-(pi))'' (Double B Minus unsolicited rating) and a short-term entity rating of 'T-5' to Mayar Holding Company. The 'BB-' ratings reflect low creditworthiness and high credit risk. The risk profile may vary significantly with changes in economic and sector conditions.
The unsolicited ratings, indicated by a 'pi' subscript, utilize analytical procedures that are parallel to traditional credit ratings, but differ in that they are based on public disclosures made available by companies, as well as other secondary sources. The 'pi' ratings do not carry an outlook. The 'pi' ratings are reviewed annually based on the latest financial statements, but may be reviewed earlier if a major event that could affect an entity's credit quality. The rated entity has not participated in the unsolicited credit rating, and the rating has not been disclosed to the rated entity prior to the announcement.
Rating Rationale: The assigned ratings incorporate Mayar's long operating track record of over two decades. Ratings also reflect good business fundamentals of elevators and escalators sector, which supports demand for the company's services, along with revenue diversification across segments and geographies. The company's presence in uncorrelated industries can help stabilize revenues during different economic cycles and market conditions. However, the ratings are constrained by a very weak financial profile, characterized by a low equity base, volatile and low margins, elevated leverage indicators, and very weak cash flow coverages. Additionally, there is a significant mismatch on the balance sheet, indicating a low capacity to meet obligations from internal cash flows.
The elevators and escalators industry in Saudi Arabia is expected to witness double digit growth from 2023 to2029. The key growth drivers of the sector comprise Vision 2030 initiatives (such as smart cities and economic zones), urbanization and population growth, as well as tourism and healthcare projects under Vision 2030. Going forward, Mayar is pursuing aggressive expansion through acquisitions, strategic partnerships, and large-scale contracts in food, agriculture, irrigation, and elevator solutions, thereby strengthening its market presence across multiple sectors.
Rating Triggers: A sizeable equity injection that reduces current leverage indicators and improve cash flow generation, resulting in enhanced debt servicing capacity, is critical for an upgrade in ratings.
About the Company: Mayar Holding Company is a Saudi joint stock company with CR#1010398836 dated 23 December 2013. The Company is engaged in management of subsidiaries of holding companies, provision of financing for subsidiaries of holding companies and owning and leasing industrial property rights to subsidiaries of holding companies.
For further information on this rating announcement, please contact Mr. Talha Iqbal, email at [e-mail].