Press Release
VIS Assigns Preliminary Rating to Mahmood Textile Mills Limited’s Proposed Short-Term Sukuk 5 (STS-5)
Karachi, April 20, 2026: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A1 (plim)’ (A One preliminary) to Mahmood Textile Mills Limited’s (‘MTML’ or ‘MEHT’ or ‘the Company’) proposed Short Term Sukuk-5 (STS-5). Short term rating of ‘A1’ reflects strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Rating to be finalized on review of executed documents.
MEHT intends to issue a privately placed Short-Term Sukuk (STS-5) of PKR 3,000 million (inclusive of PKR 1,000 million green shoe option) with 6 months tenure, to procure imported cotton during the year. 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 three-month Karachi Interbank Offered Rate (KIBOR) plus 100 basis points, set on the last working day prior to issuance with base rate reset quarterly.
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 management’s plan to deleverage the books through further sale of investment in Orient Power Company (Private) Limited. Rating remains underpinned by 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://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf