Press Release

JCR-VIS Assigns Entity Rating of A/A-2 to Century Paper & Board Mills Limited and Reaffirms Rating of Sukuk at A+

Karachi, December 7, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned medium to long term entity rating of ‘A’ (Single A) and short term rating of ‘A-2’ (A-Two) to Century Paper & Board Mills Limited (Century). JCR-VIS has reaffirmed the rating of ‘A+’ (Single A Plus) assigned to the Sukuk issued by Century. Outlook on the rating is ‘Stable’.

Ratings take into account the sustained leading position of Century in the Paper and Board industry through strong penetration in the board segment. Despite slow economic growth, demand for consumer goods continues to thrive, which in turn leads to growing demand for Century’s products. However, Century may remain constrained in enhancing capacity utilization due to energy issues. Profitability of Century depicted improvement during the out-going year. With decline in policy rate, finance cost of the company is expected to decline, providing support to the bottom line.

Continued sponsor support is an important factor in the overall risk assessment of the institution. Century has sponsor’s loan, in addition to preference shares, which are mainly held by associated companies. On a stand-alone basis, capitalization indicators of Century have depicted improvement; with adequate internal cash flow generation, debt servicing position of Century is also comfortable.

Century has redeemable preference shares outstanding, whereby Century has the option and not an obligation to redeem them in full or in part, within ninety days of the completion of each quarter, beginning November 2012. Given the sponsor support demonstrated in the past, it is expected that redemption of preference shares, whenever considered, will not place any stress on Century’s ability to meet its debt obligations.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 or fax to 35311872-3.

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