Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk of Alliance Sugar Mills Limited
Karachi, September 25, 2026: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A1 (preliminary)’ to Alliance Sugar Mills Limited’s ('ASML' or 'the Company') proposed Short-Term Sukuk - 2 (‘STS-2’ 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. Rating will be finalized on review of final Sukuk documents. The entity ratings of ASML stand at ‘A-/A2’ (Single A Minus/A Two).
ASML 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. The major shareholding of the Company is held by Mr. Makhdum Omar Shehryar following the transfer of shares from RYK Mills Limited in June 2026. Alliance Sugar intends to issue a Short-Term Sukuk – 2 (STS-2) of PKR 2,500 million (inclusive green-shoe option of PKR 500 million), to finance sugarcane procurement for the upcoming crushing season. The profit rate will be 6-month KIBOR + 150 bps p.a., with a tenor of 6 months. Principal and profit redemption of the Sukuk will be made in a bullet payment at the expiry of the tenor.
The assigned rating reflects the secured structure, supported by a ranking charge over current assets, maintenance of a Debt Payment Account (DPA) with periodic cash buildup, and availability of an unutilized working capital facility. The rating also incorporates the Company’s enhanced production capacity, higher production during the season and improved sucrose recovery. However, profitability remains constrained by lower sugar prices amid surplus stocks in the domestic market. While the potential allowance of sugar exports under discussion is expected to provide support to market prices, the Company continues to generate adequate coverage for its borrowings at prevailing prices. The financial profile is also expected to benefit from the planned equity injection, which should support improvement in capitalization. Timely realization of inventory and corresponding reduction in working capital borrowings will remain important considerations for the rating.
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/Methodologies-2026/Corporate-Rating-2026.pdf
Instrument Rating
https://docs.vis.com.pk/Methodologies-2026/IRM-2026.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf