Press Release

VIS Assigns Preliminary Rating to Proposed Short Term Sukuk of At-Tahur Limited

Karachi, August 12, 2024: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A-1’ to At-Tahur Limited (‘ATL’ or ‘the Company’) proposed Short Term Sukuk (‘STS’ or ‘the Instrument’). Short term rating of ‘A-1’ reflects strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Entity ratings of ATL stands at ‘A-/A-2’ (Single A-minus/ A-Two). Outlook on the assigned entity rating of ATL is ‘Stable’.

At-Tahur Limited (‘ATL’ or ‘the Company’) is involved in farming operations since 2008. The Company introduced its brand ‘Prema’ in the market in 2009, launching premium quality pasteurized milk, and subsequently launched other products such as whole milk, low-fat milk, ranges of yogurt, laban & flavored milk, butter and cheese, etc.

ATL plans to issue a short-term, secured, privately placed Sukuk amounting to Rs. 750 million inclusive of a Green Shoe Option of Rs. 250 million. The issue will be utilized by ATL to meet its working capital requirements. The instrument will have a tenor of up to six months starting from the issue date and profit will be payable at maturity of STS on the outstanding principal amount. Profit payment will be at a proposed rate of 6M Kibor + 2%.

Assigned rating reflects the proposed security structure of the instrument providing a charge over Current Assets along with an additional charge over biological assets of the Company amounting to Rs. 750 million. In addition, maintenance of a Debt Payment Account provides comfort. Assessment of financial position of the Company reflects revenue growth during FY23 and 9M’FY24. Margins remained under pressure; however, management expects a rebound in profitability indicators going forward, driven by the company's focus on high-margin products. Rating is also supported by a positive working capital cycle, comfortable short term borrowing coverage together with low leverage and satisfactory debt service coverage.

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

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .