Press Release
VIS Finalizes Rating to Short Term Sukuk of Alliance Sugar Mills Limited
Karachi, May 15, 2026: VIS Credit Rating Company Limited (VIS) has finalized rating of ‘A1 (A One)’ to Alliance Sugar Mills Limited’s proposed PKR 2,000 Mn Short-Term Sukuk (‘Sukuk’ or ‘the Instrument’). The short-term rating of 'A1’ denotes a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The entity ratings of the Company are ‘A-/A2’ (‘A Minus / A Two’) with a ‘Stable’ outlook announced on June 17,2025.
Alliance Sugar Mills Limited (‘ASML’ or the ‘Company’) has issued a Rated, Unsecured, Privately Placed Short-Term Sukuk of up to PKR 2,000mn, to finance sugarcane procurement for the upcoming crushing season and support seasonal working capital requirements. The Sukuk carries a tenor of six months, with pricing linked to 6M KIBOR plus 200 bps, and principal and interest repayment structured as a bullet payment at maturity. The Sukuk was issued on March 26, 2026, and will be redeemed on September 25, 2026. The instrument was supported by structural safeguards, including the establishment of a Sukuk Payment Account (SPA) under lien with structured prefunding arrangements for the benefit of investors, whereby 25% of the payment amount was deposited on the last day of the 4th month after the Issue Date, a further 25% on the last day of the 5th month after the Issue Date, and the remaining 50% 10 business days prior to the Maturity Date, along with a corporate guarantee from the sponsor group 'RYK Mills Limited', providing additional comfort for timely repayment.
Disbursement of the Sukuk proceeds was made on March 26, 2026, and receipt of funds was duly confirmed by both the Investment Agent and the Company.
The assigned rating reflects ASML’s sound financial risk profile, supported by improved profitability, strengthened capitalization, and adequate liquidity. The Company continues to benefit from firm sugar prices, operational efficiency, and prudent cost management, resulting in stable cash flow generation. Capitalization has improved on account of equity accretion and asset revaluation, while gearing and coverage indicators remain at comfortable levels. The rating further incorporates the Company’s ability to maintain stable margins amid steady demand dynamics in the sugar sector. Operational performance is expected to strengthen further with planned capacity enhancements.
Comfort is also drawn from the presence of structural protections, including the Debt Payment Account mechanism with prefunding and sponsor support through a corporate guarantee. The rating remains underpinned by the availability of financial support from the parent company, as and when required, along with the Company’s ability to sustain adequate liquidity buffers and prudent financial management. The outlook on the assigned rating is stable.
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