Press Release

VIS Maintains Entity Ratings of J.K Spinning Mills Limited

Karachi, April 24, 2020: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of J.K Spinning Mills Limited (JKSML) at ‘A-/A-1’ (Single A-Minus/A-One). The assigned ratings have been placed on ‘Rating Watch-Developing’ status. The medium to long-term rating of ‘A-’ signifies good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-1’ denotes high certainty of timely payments coupled with excellent liquidity and fundamental protection factors. The previous rating action was announced on March 28, 2019.

JKSM, a part of J.K Group, operates spinning, weaving and stitching divisions, with course yarn and home textile offered as its key products. Majority shareholding is vested within the sponsoring family which is actively involved in the operations of the company. Net sales comprises a mix of local and export sales, with yarn majorly sold in local markets, while sale of processed fabric and made-ups largely constituted export sales. The company has enhanced its operating capacity in all segments over the last two years.

The revision in the rating outlook reflects prevailing uncertainty in textile sector dynamics due to coronavirus outbreak, prolonged lockdown, overall contraction in demand and challenging economic environment. It is expected that the entire value chain of textile industry will be affected by these developments. Status of the assigned ratings is therefore uncertain as an event of deviation from the expected trend has occurred; additional information is necessary to take any further rating action, warranting a ‘Rating Watch-Developing’ status. Given relatively stable financial position, 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 Ms. Tayyaba Ijaz 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at info@vis.com.pk



Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Corporates (May 2019)
http://vis.com.pk/kc-meth.aspx

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright April 24, 2020 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.