Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk (STS) of Ittehad Chemicals Limited
Karachi, June 9, 2026: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A1 (plim)’ to Ittehad Chemicals Limited’s (‘ICL’ or ‘the Company’) proposed Short Term Sukuk (STS). 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. The entity ratings of ICL stand at ‘A/A1’ (Single A/A One). Outlook on the assigned medium to long-term rating is ‘Stable’.
ICL plans to issue a privately placed, unsecured Short-term Sukuk (STS) of Rs. 1,500 million (inclusive of a Green Shoe Option of Rs. 500 million) to fund working capital requirements. The instrument will have a tenure of up to 6 months from date of drawdown, with profit paid quarterly and redemption in bullet at maturity, while the expected profit rate will be 3 Month KIBOR minus 0.25% per annum.
The assigned rating reflects ICL’s established presence in the chemical sector and adequate financial risk profile. Key credit support stems from the Company’s diversified chlor-alkali and downstream product portfolio, sustained local demand, and ongoing initiatives to improve value addition and operating efficiency, including the flaker plant and biomass-based power project. While profitability margins remained under pressure due to elevated raw material, utility, and salary costs, net profit was largely sustained on the back of higher sales and lower finance costs. Cash flows and debt servicing coverage remained sound. Liquidity indicators improved by end-9MFY26, supported by higher cash balances, reduction in short-term borrowings, and adequate coverage of short-term debt through stock-in-trade and trade debts. Going forward, profitability is expected to benefit from new product additions, export growth, and anticipated energy cost savings following commissioning of the biomass-based power plant. The rating remains dependent on ICL’s ability to sustain liquidity buffers and ensure timely repayment of profit and principal at maturity.
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