Press Release

VIS maintains Ratings of M.K. Sons (Pvt.) Limited with ‘Rating Watch-Negative’ status
 

Karachi, April 27, 2020: VIS Credit Rating Company Limited (VIS), while maintained the entity ratings of M.K. Sons (Pvt.) Limited (MKSL) at ‘A-/A-2’ (Single A Minus/A-Two), has placed the same on ‘Rating Watch - Negative’ status. The medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and fundamental protection factors. The previous rating action was announced on Dec 30, 2019.

MKSL has vertical based manufacturing and finishing operations consisting of a weaving, processing and stitching unit for home textile products. Product portfolio primarily includes home textile, processed fabric, garments and grey fabric. Textile made ups including bed sets are the main revenue driver for the company constituting more than half of the export sales. Europe is the main export market for the company constituting major share of the total export revenues followed by North America. The customers of the company include renowned international brands. Despite dealing with prominent wholesale clients, the client concentration was manageable during FY19.


With the advent of global corona virus pandemic, the demand outlook for textile products in general and especially value added export oriented units looks weak. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action, warranting a ‘Rating-Watch’ status. With the demand compression emerging from ongoing global crisis and continued lockdown situation coupled with company’s leveraged structure, ratings are being placed on ‘Negative’ outlook. The ratings are dependent upon maintenance of overall sales, market share in exports, profit margin, debt service coverage, and gearing ratios at an adequate level, with outlook subject to be reviewed once the situation stabilizes.

For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 201) or email at info@vis.com.pk .




Faryal Ahmad Faheem
Deputy CEO


Applicable rating criterion: Corporates (May 2019)


________________________________________________________________________________________________________________________________
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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited