Press Release
VIS Finalizes Rating of Long Term Sukuk of Thatta Cement Company Limited
Karachi, November 14, 2025: VIS Credit Rating Company Limited (VIS) has assigned final rating of ‘AA-’ (Double A minus) to Thatta Cement Company Limited’s PKR 5.5 bn Long-Term Sukuk I (LTS-I) (‘Sukuk’ or ‘the Instrument’). The long-term rating of 'AA-' denotes high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Outlook on the instrument rating is ‘Stable’. The outstanding entity ratings of THCCL are ‘A/A2’ with a ‘Stable’ outlook. Previous rating action was announced on September 18, 2025.
THCCL has issued a secured, listed, & privately placed Long-Term Islamic Certificate of up to PKR 5,500 million inclusive of green shoe option of PKR 500 million on 10th October, 2025. The proceeds from the issue will be utilized for the purpose of acquiring a listed operational company registered under the Companies Act, 2017. The tenor of the instrument is four (04) years from the date of drawdown and the profit rate is based on 6 months KIBOR plus 2.50% per annum. Profit will be payable on six monthly basis in arrears on the outstanding principal amount.
The assigned rating of THCCL reflect sustained improvement in financial performance, supported by stronger profitability, enhanced liquidity, and a conservative capital structure. Profitability was reinforced by the shift to cost-efficient domestic coal and the commissioning of a 5MW solar project and 4.8 MW wind power plant, which diversified the energy mix and provided an effective hedge against input cost volatility. Capitalization remains conservative, with no long-term debt and minimal reliance on short-term borrowings, translating into low gearing and strong debt-servicing capacity underpinned by healthy cash flows. The issued PKR 5.5b sukuk for acquisition will elevate leverage, but improved core profitability and cash flows from the operational target are expected to support gradual deleveraging and restore capitalization to comfortable levels over the medium term.
Sukuk rating incorporates credit enhancement, including charge over the Company’s present and future current and fixed assets, creation of a Sukuk Payment Account (SPA) funded 30 days prior to payment date, and a signed undertaking, approved by the Board, authorizing sell off of Treasury Shares in case of any shortfall in the SPA for Sukuk repayments. The disposal of Treasury Shares, if triggered, is to be completed within 20 days to ensure the SPA is adequately funded at least 10 days before the payment due date.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporate Rating
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