Press Release
VIS Finalizes Rating to Short Term Sukuk 1 of RYK Mills Limited
Karachi, April 27, 2026: VIS Credit Rating Company Limited (VIS) has finalized rating of ‘A1’ (A One) to Short-Term Sukuk 1 issue of up to PKR 4,000 million of RYK Mills Limited (‘RYKML’ or the ‘Company’). The short-term rating of ‘A1’ indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The entity ratings of the Company are ‘A/A2’ (‘A / A Two’) with a ‘Positive’ outlook announced on February 13,2026.
RYK Mills Limited (‘RYK’ or the ‘Company’) has issued a Rated, Secured, Privately Placed Short-Term Sukuk of up to PKR 4,000mn to meet its working capital requirements and optimize its short-term borrowing profile. The Sukuk carries a tenor of six months, priced at 3M KIBOR + 140 bps, with principal repayment structured as a bullet payment at maturity. The instrument is secured through a first ranking charge over present and future current assets, along with the establishment of a Sukuk Payment Account (SPA) under exclusive lien in favour of investors, providing additional comfort for timely repayment.
The assigned rating draws support from the Company’s presence in the domestic sugar sector, which benefits from the essential nature of sugar consumption, though remains exposed to risks associated with fluctuations in sugarcane production, recovery rates, and regulatory interventions. The Company’s established operational footprint, integrated business model, sizeable asset base, and relatively large crushing capacity underpin its competitive positioning. Strategic focus on operational efficiency, improved cane sourcing, and cost optimization supports relative stability across crop cycles, while diversification into ethanol and power generation provides additional revenue streams, partially mitigating volatility inherent in the core sugar segment.
The rating further incorporates the Company’s established market presence and ongoing efforts to enhance operational stability through improved working capital management and financial discipline. Comfort is also drawn from the security structure of the instrument, including a ranking charge over current assets and the maintenance of a Sukuk Payment Account under lien for the benefit of investors. While capitalization indicators remain elevated relative to industry benchmarks, demonstrated sponsor support provides partial mitigation of financial risk concerns. The rating remains underpinned by the Company’s ability to maintain adequate liquidity buffers, manage leverage prudently, and sustain operational performance amid sector-specific risks.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Instrument Rating
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf