JCR-VIS Assigns Preliminary Rating to Sukuk Issue of Saif Textile Mills Limited

Karachi, April 18, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary rating of ‘A’ (Single A) to the proposed Sukuk issue of Saif Textile Mills Limited (STML). The outlook on the rating is ‘Stable’. Sukuk rating will be converted into final rating upon review of signed legal documents.

STML is involved in the manufacturing and sale of cotton and synthetic yarn. Majority shareholding of the company is vested with Saif Holdings Limited (SHL). SHL has interests in Textile, Feeds, Energy, Health, Technology and Real Estate sectors.

The company intends to raise Rs. 750 million (inclusive of a green shoe option of Rs. 250 million) through a Sukuk issue with a tenor of 6 years inclusive of a 1 year grace period. Proceeds of the Sukuk will be utilized for capital expenditure, fixed working capital and re-profiling of the company’s balance sheet by paying off short term borrowings. Principal repayment of the Sukuk will be made in 20 quarterly installments.

Rating draws strength from the Debt Service Account (DSA) mechanism envisaged for the payment of the Sukuk and its strict implementation whereby proceeds from sales will be transferred to the DSA every month to the extent that it covers 1/3rd of the quarterly installment by the middle of every month.

For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk