Press Release

VIS Maintains Entity Ratings of Akhtar Textile Industries (Private) Limited with ‘Rating Watch-Negative’ Status
 

Karachi, April 24, 2020: VIS Credit Rating Company Limited (VIS), while maintaining the entity rating of ‘A-/A-2’ (A Minus/A-Two) assigned to Akhtar Textile Industries (Private) Limited (ATIL) has placed the same on ‘Rating Watch - Negative’ status. The long-term rating of ‘A-’ signifies good credit quality and adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-2’ depicts good certainty of timely payment. Liquidity factors and company fundamentals are sound with good access to capital markets. Previous rating action was announced on November 17, 2019.

Incorporated in 1985, ATIL is engaged in the business of manufacturing and exports of denim garments. The company is a part of Akhtar Group of Companies which is a family owned group with specialization in the textile sector particularly denim fabric and garments along with diversified interests in the dairy and power sectors.

The revision in rating outlook reflects prevailing uncertainty in textile sector dynamics due to coronavirus outbreak, prolonged lockdown, overall contraction in demand, sharp fall in cotton prices and challenging economic environment. It is expected that the entire value chain of the textile industry will be impacted by these developments. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action. Aforementioned operating dynamics coupled with leveraged capital structure of the company warrant a ‘Rating Watch-Negative’ status. The ratings are dependent upon maintenance of overall sales, profit margins, debt service coverage, and gearing ratios at an adequate level, with outlook subject to be reviewed once the situation stabilizes.


For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk.



Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

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