Press Release
VIS Assign Preliminary Rating to Mahmood Textile Mills Limited’s Proposed Short-Term Sukuk 2 (STS-2)
Karachi, October 9, 2025: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A1 (plim)’ (A One preliminary) to the proposed Short-term Sukuk of Mahmood Textile Mills Limited (‘MEHT’ or ‘the Company’). Short term rating of ‘A1’ reflects strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Rating will be finalized on review of final documents.
MEHT intends to issue a privately placed Short-Term Sukuk (STS-2) of PKR 6,000 million to finance working capital needs during the cotton procurement season. The Sukuk will carry a single bullet repayment of principal at maturity, with profit payable alongside the principal amount. The profit rate will be benchmarked to the six-month Karachi Interbank Offered Rate (KIBOR) plus 70 basis points, fixed on the last working day prior to issuance and applicable for the full tenor.
The assigned rating reflects the strong footprint of the Mahmood Group across the textile value chain and related businesses, as well as the security structure supporting the instrument. This includes charge over assets, availability of equivalent working capital lines, buildup of a dedicated payment account (DPA), and the planned sale of operating assets and shares in Orient Power Company (Pvt.) Limited to reduce leverage. Rating remains underpinned on management’s ongoing efforts to strengthen the balance sheet.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale:
https://docs.vis.com.pk/docs/VISRatingScales.pdf
Instrument Rating:
(https://backupsqlvis.s3.us-west-2.amazonaws.com/Methodologies-2025/IRM-Apr-25.pdf)