Press Release

JCR-VIS Reaffirms Entity Ratings of MIMA Leather (Pvt.) Ltd.

Karachi, February 13, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of MIMA Leather (Pvt.) Limited (MIMA) at ‘BBB/A-3’ (Triple B/A-Three). Outlook on the medium to long term rating is ‘Stable’.

MIMA is part of the MIMA group of companies and is engaged in the manufacturing of finished leather from goat and sheep skins. Apart from MIMA, two other group companies operate in the leather sector; these are engaged in tanning operations & production of leather garments & accessories. Combined sales of the three entities were over Rs. 2.5b in FY11.

Sales growth of MIMA has continued for the second consecutive year in FY11. Aggregate leather exports of Pakistan also picked up to $1.1b in FY11. Despite higher volumes of sales during FY11, cash flows from operations weakened on account of lower margins registered during the period. The leather industry in Pakistan is presently faced with downward pressure on margins on account of a significant increase in prices of raw skins. A combination of higher interest rates and lower margins could place strain on the company’s ability to service debt.

In the past, MIMA has received sponsor support in the form of interest free loans, the quantum of which increased slightly in FY11. The group has recently concluded sale transaction of a company, which is likely to reduce overall debt levels within the group entities. Ratings derive comfort from the improved liquidity position of associated concerns.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 (10 lines) or fax to 35311873.

Jamal Abbas Zaidi
Deputy 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 2012 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