Pakistan Credit Rating Agency Limited maintains Entity Ratings of Fazal Cloth Mills Limited

Lahore, October 22, 2013 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Fazal Cloth Mills Limited (FCML) at “A-” (Single A Minus) and “A2″ (A Two), respectively. These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings reflect FCML’s strengthening business profile characterized by the company’s continuing investment in capacity expansions. Successful forward integration of weaving segment has facilitated FCML in diversifying product mix.

The company, while expanding its existing portfolio of products, intends to invest further in value added segments. However, it may take time to achieve desired results. Meanwhile, the company’s financial profile remains stretched owing to continuing expansion spree that keeps leveraging at high level. Nevertheless, comfort is drawn from adequate cashflows and largely stable coverages.

The ratings are dependent on the company’s ability to prudently mange its debt profile, given no plans to taper down leveraged expansions. Meanwhile, fostering its market position while sustaining business margins is important.

The sponsoring families are experiencing ownership transition in certain companies of the group. Smooth completion of affairs without any drag on performance is important. At the same time, strengthening governance framework for better oversight of strategic affair is considered essential.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

The post Pakistan Credit Rating Agency Limited maintains Entity Ratings of Fazal Cloth Mills Limited appeared first on AsiaNet-Pakistan.

Leave a Reply