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

Karachi, January 28, 2019 (PPI-OT):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 more information, contact:
Director Compliance and Rating Analytics,
JCR-VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: http://jcrvis.com.pk/