Press Release

JCR-VIS assigns a Rating of AA-/A-1 to Sitara Chemical Industries Limited with ‘Stable’ Outlook

Karachi, January 06, 2009: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned an initial medium to long-term entity rating of ‘AA-’ (Double A Minus) and short term rating of ‘A-1’ (A One) to Sitara Chemical Industries Limited (Sitara) with ‘Stable’ outlook.

The rating incorporates Sitara’s strong franchise value and its position as a market leader in the domestic caustic soda industry. Amidst difficult economic conditions and rising energy crisis, the company maintained consistent growth in sales. Moreover, enhanced efficiency in terms of energy cost translated into better margins and improved profitability indicators. Sitara’s strong internal cash generating capacity is sufficient for timely servicing of its debt obligations. Going forward, steady stream of revenues is expected from an established client base, which will continue to provide support to operations.

Proposed BMR in the coming year should enable Sitara to further enhance its operating capacity. Planned capital expenditure may put some stress on operational cash flows unless growth momentum is maintained. In case debt coverage ratios fall below levels commensurate with assigned ratings, sponsors are committed to reduce the debt burden either through liquidation of non-core assets or an equity injection. JCR-VIS will closely monitor trends in this regard.

For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 501) or Mr. Sabeen Saleem ( 510) at 021-5671822/5671833/5680996 or fax to 021-5681105/5671600.

Faheem Ahmed
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2009 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited