Press Release

VIS Assigns Final Bank Loan Rating to OBS Pharma (Private) Limited Islamic Syndicated Finance Facility

Karachi, March 28, 2024: Upon submission of executed legal documents, VIS Credit Rating Company Ltd. (VIS) has assigned final rating of ‘A+(blr)’ (Single A plus (blr)) to the Islamic Syndicated Financing facility of PKR. 5,125 mln of OBS Pharma (Private) Limited (OBS Pharma). Previously, preliminary rating was issued on proposed facility amount of Rs. 5,250m, which has been revised to Rs. 5,125m on finalization. Rating of ‘A+(blr)’ signifies good credit quality with adequate protection factors. Risks may vary with possible changes in the economy. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on July 03, 2023.

OBS Pharma (Pvt.) Limited is a Special Purpose Company (SPC) created to acquire 12 pharmaceutical brands and a manufacturing facility based in Lahore from Bayer A.G. It is a 80% subsidiary of Aitkenstuart Pakistan (Pvt.) Limited, with the ultimate parent company being West End 16 Pte Limited, Singapore. The agreement for the acquisition was made on November 21, 2022, for a total cost of Rs 6,825 mln, which has concluded in July 2023. The proposed capital structure consists of 75% debt (PKR 5,125 mln) and 25% equity (PKR 1,700 mln), sourced through a Syndicated Islamic Financing facility and Aitkenstuart's equity injection via subordinate loan.

The facility was disbursed on July 5, 2023 and has a tenor of 7 years (including 18 months grace period). Principal amount will be redeemed through 22 equal installments, starting from the twenty-first month post the initial disbursement. It is secured with a First Pari Passu charge over all current and future fixed assets of OBS Pharma, which includes but is not limited to the manufacturing facility acquired from Bayer Pakistan, inclusive of a 20% margin, a First Pari Passu charge over all current and future fixed assets of Aspin Pharma (Pvt.) Limited, inclusive of a 20% margin, a Corporate Guarantee provided by Aitkenstuart Pakistan (Pvt.) Ltd., and a Lien on the Collection and Finance Payment Account (FPA). The facility entails quarterly profit payments, which is to operate at a floating rate consisting of the 3-Month KIBOR plus an additional spread of 1.70% per annum.

Assigned rating reflects OBS Group’s strong market presence and proven track record of successful acquisitions that provide a foundation for projected revenue growth and margin improvement in the coming years. Rating also incorporates strong market presence of product portfolio. With flagship brands like Gravibinan, Ciproxin, and Primolut N leading the market, OBS Pharma commands a strong competitive position in the industry. Leveraging its extensive distribution network, OBS Pharma is poised to expand the coverage of its acquired portfolio, aiming to capture a larger market share. Additionally, plans are in place to bolster the team size to enhance marketing and sales efforts, with management projecting strong sales growth for the acquired portfolio. Moreover, OBS Pharma identifies the women's healthcare segment as a significant growth opportunity in the pharmaceutical sector, intending to introduce more products to capitalize on this market. Anticipated improvements in gross margins over time, driven by reduced raw material costs resulting from changes in Active Pharmaceutical Ingredients (API) sourcing, should support profitability and streamlining of capitalization indicators over time.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at

Applicable Rating Criteria: Corporates:

VIS Bank Loan Rating Criteria Methodology

VIS Issue/Issuer Rating Scale

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 .