Press Release

JCR-VIS assigns Entity & PTC Ratings to Treet Corporation Limited

Karachi, June 1, 2010: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned medium to long-term and short term entity ratings of ‘AA-’ (Double A Minus) and A-1 (A-One) respectively, to Treet Corporation Limited (TCL). JCR-VIS has also assigned preliminary medium to long term rating of AA (Double A) to the proposed PTC issue of Rs. 1.255 billion of TCL. The outlook on the ratings is ‘Stable’.

Treet Group of Companies (TGC) has been in operations for the last 30 years primarily under the umbrella of TCL. The group is principally engaged in the manufacturing & sale of blades and shaving systems, soap and packaging products including paper and board. TGC has a diverse product mix serving retail and industrial clients of both local and international origin. Over the years, TCL has developed expertise in the manufacturing of blades and the company is currently the leader in the double edge blades market with around 75% share. To an extent, the company is dependent on the supply chain stability of its imported raw materials requirement. TCL has a controlling stake in First Treet Manufacturing Modaraba (FTMM) and its management company which also has distribution rights of Treet products.

The secured, listed, convertible participatory redeemable capital is being offered by way of a renounceable right offer to existing shareholders in accordance with their existing shareholding. The PTC has a mandatory yearly conversion into common stocks at a predetermined price to the extent of 96.5 percent of the value of the issue price of PTC. The return on PTC is based on profit and loss sharing under a tiered mechanism. The PTC is being issued to replace existing markup based debt to mitigate the financial risk profile of the company as also to provide an opportunity of profit sharing to the investors in the PTC.

The rating assigned to the PTC issue takes into account the mandatory conversion feature of a significant value of the PTC into common stocks and its return being based on profit and loss sharing mechanism. The ensuing risk mitigation through equity build up and risk management covenants incorporated in the PTC structure have also been factored in the assigned rating. Lien marking of investment in the shares of associated companies amounting to Rs. 250 million as trust security/property is also a key rating factor. PTC rating will be converted into final rating upon review of signed legal documents and finalization of the approval process of PTC.

For further information on this rating announcement, please contact Mr. Javed Callea at 021-35311861 (Ext: 501) or Mr. Maimoon Rasheed at 042-6610681 or fax to 35311873.

Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2010 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited