Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk of Alliance Sugar Mills Limited
Karachi, November 04, 2025: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A1 (preliminary)’ to Alliance Sugar Mills Limited’s proposed PKR 2,500 Mn Short-Term Sukuk (‘Sukuk’ or ‘the Instrument’). The short-term rating of 'A1 (plim)' denotes a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the instrument rating is ‘Stable’. Rating will be finalized on review of final Sukuk documents.
Alliance Sugar Mills Limited (‘ASML’ or ‘the Company’) is a public unlisted company incorporated in Pakistan in 2011. The Company is engaged in the production and sale of sugar and its by-products. ASML operates as a wholly owned subsidiary of RYK Mills Limited (‘RYKML’ or ‘the Holding Company’). The Company’s registered and head office (‘HO’) is located at Lahore while the manufacturing unit is located at Ghotki, Sindh. Alliance Sugar intends to issue a Short-Term Sukuk (STS) of PKR 2,000 million, with an additional green-shoe option of PKR 500 million, to finance sugarcane procurement for the upcoming crushing season. The profit rate will be Base Rate + 125 bps p.a., with a tenor of 6 months. Principal redemption of the Sukuk will be made in a bullet payment at the expiry of the tenor.
The assigned rating of Alliance Sugar reflects improved financial performance, supported by higher profitability, strong liquidity, and prudent balance sheet management. Improved selling prices enhanced margins, while debottlenecking initiatives aim to further strengthen operations. The company also secured a PKR 2 billion term finance facility to address balance sheet mismatches and improve liquidity alignment. Additional comfort is drawn from sugar’s essential commodity status and structural safeguards, including the DPA mechanism and borrowing covenants, which provide investor protection.
Considering these structural safeguards, robust collateral coverage, and stable industry fundamentals, the instrument rating has been notched up to ‘A1 (plim)’ to reflect the strengthened security and controlled repayment framework.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporate Rating
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf
Instrument Rating
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf