Press Release

JCR-VIS reaffirms the Rating of the Sukuk of Quetta Textile Mills Ltd.

Karachi, May 27, 2010: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the medium-to-long-term ratings assigned to the Rs 1.385 billion Sukuk of Quetta Textile Mills Limited (QTML) at BBB+ (Triple B Plus). Outlook on the rating is ‘Stable’.

The reaffirmation of ratings is based on the recent improvement in QTML’s profitability position. Though, the margins were under continued stress during 1HY2010, these are now gradually improving with the cyclical upturn of spinning industry. These recent improvements are likely to continue in medium term. However, recent initiatives of quota restrictions followed by imposition of regulatory duty have limited the industry’s ability to fully benefit from the upsurge.

QTML has successfully made payment including profit and principal falling due on Sukuk during the current financial year. Cash flow coverage has improved during 3Q2010, however, remained under stress with corresponding increase in debt levels amplified due to cotton prices being at an all time high during the period. The level of future cash flows and consequent debt service coverage will also depend on the regulatory environment. JCR-VIS is closely following the results reported by the spinning industry. Sustainability of the currently favorable trends will determine the future direction of ratings assigned.

For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 604) or Ms. Sabeen Saleem (Ext: 510) at 021-35311861 or fax to 021-35311873.

Faheem Ahmad
President & CEO

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 2010 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited