Press Release
VIS Maintains Entity Ratings of Zaman Textile Mills (Pvt.) Limited
Karachi, April 24, 2020: VIS Credit Rating Company Limited (VIS), while maintaining the entity ratings of ‘A-/A2’ (Single A Minus/A-Two) assigned to Zaman Textile Mills (Pvt.) Limited (ZTML), has placed the same on ‘Rating Watch-Developing’ status. Long Term Rating of ‘A-’ reflects good credit quality with adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A2’ signifies good certainty of timely payment, sound liquidity factors and company fundamentals, and good access to capital markets. Risk factors are small. The previous rating was announced on 29nd November 2019.
ZTML is a family-owned business, which is principally engaged in manufacturing, processing, sale and trading of yarn and fabric. The product portfolio of the company includes coarse yarn (20-30s), greige & dyed fabric that is sold in the local market, whereas coarse yarn (20d), hospital gowns, home textiles, greige & bleached fabric are sold in the export market. The company operates through two factories located at Kotri Industrial Estate near Hyderabad that is engaged in yarn manufacturing; whereas the fabric weaving, dyeing and printing facilities are based in Landhi Industrial Area, Karachi. The power requirements of both production units are met through in-house gas based generators and turbine. Major portion of revenues are generated through local sales.
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, warranting a ‘Rating Watch-Developing’ status. Given the adequate financial profile, it is expected that ratings will remain stable post recovery of the ongoing situation; nevertheless, as scenario is evolving rapidly, VIS will closely monitor and will accordingly take action to resolve the outlook status.
For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) 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