Press Release
VIS Credit Rating Company Maintains Entity Ratings of Rajby Industries
Karachi, April 23, 2020: VIS Credit Rating Company Ltd. (VIS), while maintaining the entity ratings of Rajby Industries (RI) at ‘A-/A-2’ (Single A Minus/A-Two), has placed the same on ‘Rating Watch - Negative’ Status. Long Term Rating of ‘A-’ signifies good credit quality and adequate protection factors. Short Term Rating of ‘A-2’ indicates good certainty of timely payment, sound liquidity factors and company fundamentals. Access to capital markets is good and risk factors are small. Previous rating action was announced on November 29, 2019.
Rajby Industries (RI) belongs to the Rajby Group of Companies which has extensive experience in the textile sector (over 4 decades) and has been operating in the denim manufacturing business since 1988. The group operates through two different companies RI (involved in manufacturing of denim garments) and Rajby Textiles (Private) Limited (RTPL) (involved in manufacturing of denim fabric and is also setting up a spinning unit which will make the operations of the group vertically integrated). RI offers one-stop solution offering cutting, stitching, washing, finishing, quality control to clearance and delivery of denim apparels through a number of production facilities.
The revision in rating outlook reflects prevailing uncertainty in textile sector dynamics due to coronavirus outbreak, prolonged lockdown, overall contraction in demand and challenging economic environment. It is expected that the entire value chain of the textile industry will be impacted by these developments. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action, warranting a ‘Rating Watch’ status. Given the demand compression emerging from the continued lockdown situation in major export markets and elevated leverage indicators, ratings are being placed on ‘Negative’ outlook. Ratings remain dependent on maintaining cash flow coverages and prudent leverage indicators. VIS will closely monitor and will accordingly take action to resolve the outlook status.
For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk.
Faryal Ahmad Faheem
Deputy CEO
Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf