Press Release

VIS Maintains Ratings of Crescent Bahuman Limited with ‘Rating Watch - Developing’ Status

Karachi, April 22, 2020: VIS Credit Rating Company Limited (VIS), while maintaining the entity ratings of ‘A-/A2’ (Single A Minus/A-Two) assigned to Crescent Bahuman Limited (CBL), has placed the same on ‘Rating Watch-Developing’ status. The long term rating of ‘A-’ signifies good credit quality; protection factors are adequate. Risk factors may vary 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. The previous rating action was announced on December 20, 2019.

CBL is an export-oriented, vertically integrated denim fabric and garment manufacturing company. Customer base of the company mainly includes Levi Strauss & Co., Express LLC, Realteks Tekstil, Dressmann AS, Jeans Collection and Grotto SPA. Revenue model of the company encompasses denim garments, denim fabric, retail and yarn sales, with exports accounting for more than 90% of total revenue.

The revision in 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 the textile industry will be effected 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 that company has low borrowings compared to its equity level, 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 Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (306) or email at info@vis.com.pk


Faryal Ahmad Faheem
Deputy CEO

VIS Entity Rating Criteria Corporates (May 2019)

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 22, 2020 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.