Press Release

VIS Assigns Initial Entity Ratings to Chakwal Textile Mills Limited

Karachi, May 27, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB-’/A-2’ (Triple B Minus/A-Two) to Chakwal Textile Mills Limited (CTML). The medium to long-term rating of ‘BBB-’ denotes adequate credit quality coupled with reasonable & sufficient protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely repayment, sound liquidity factors and good company’s fundamentals. Outlook on the assigned ratings is ‘Stable’.

CTML is a spinning mill specialized in the production of polyester viscose yarn of different counts mainly for wash & wear fabric. The company generates almost 100% sales through local customers. Shareholding is mainly vested with the sponsoring family which is actively involved in the day to day affairs of the company. The company generated sales growth during last three years mainly through volumetric increase which impacted profits positively. With installation of MVS machines during FY17, the company was able to increase capacity and hence started producing coarse counts PV yarn also. Trade receivables of the company continue to remain modest as yarn is mostly sold on a cash basis. The company retired all its borrowings by end-9MFY19. Liquidity indicators and coverages have remained adequate. The ratings are dependent upon sustained maintenance of overall financial indicators.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.


Javed Callea
Advisor

Applicable rating criterion: Corporates (May 2019)
https://www.vis.com.pk/kc-meth.aspx

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 June 19, 2019 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.