Press Release

JCR-VIS Assigns Initial Ratings to Siara Textile Mills (Pvt.) Limited

Karachi, January 28, 2019: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘BBB-/A-2’ (Triple B Minus/A-Two) to Siara Textile Mills (Pvt.) Limited (STML). The medium to long-term rating of ‘BBB-’ denotes adequate credit quality coupled with reasonable protection factors. Moreover, risk factors are considered variable with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound and risk factors considered small. Outlook on the assigned ratings is ‘Stable’.

STML is a small-sized spinning unit involved in manufacturing of yarn. STML is a family owned business with 100% shareholding vested with the sponsoring family; members of which are actively involved in the operations of the company. The ratings take into account sound debt coverage substantiated by adequate funds from operations and virtual absence of long-term debt. The ratings are largely constrained by STML’s spinning unit running close to full capacity, small equity base and the vulnerability of the spinning sector to raw material prices. With increasing proportion of imported cotton, the company remains exposed to fluctuations in Pak rupee vis-à-vis foreign currencies. The ratings are dependent upon maintenance of leverage indicators at the current levels in an event of capacity expansion or otherwise.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Javed Callea

Applicable rating criterion: Industrial Corporate (May, 2016)

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 2019 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