Press Release

VIS Reaffirms Ratings of International Brands Limited. Rating outlook of Sukuk Issue has been revised to ‘Stable’

Karachi, February 18, 2021: VIS Credit Rating Company Limited (VIS) has maintained the sukuk issue rating of International Brands Limited (IBL) at ‘AA’ (Double A) while the rating outlook has been revised from ‘Rating Watch-Developing’ to ‘Stable’. Entity ratings of IBL have been reaffirmed at A/A-2 (Single A/ A-Two) with a ‘Stable’ outlook. Previous rating action was announced on May 21, 2020.

IBL raised Rs. 2.83billion through a Sukuk issue in FY18. Security structure of the Sukuk entails pledge of shares of The Searle Company Limited (Searle). In FY19, the principal repayment structure was revised from bullet to monthly payments and 28 fixed monthly installments (principal plus quarterly profit) of Rs. 120m each were committed to Sukuk holders. The arrangement functioned smoothly from Aug’19 to Apr’20 and 9 (out of 28 installments) were paid. However, with the advent of Covid19 pandemic, its impact on the Group and in line with the deferment policy announced by SBP, principal payment for six-month period were deferred by the Sukuk certificate-holders with the continuation of quarterly profit payments. As planned, principal payments have resumed from Nov’20 onwards.

IBL adequately maintains a separate debt service account for Sukuk repayment in which funds are made available 10 days prior to each due date. In case of any shortfall in the same, the Sukuk issues carries a feature of timely sale or convertibility into shares of Searle which is a fall back arrangement and is a key rating strength of Sukuk. Moreover, in addition to operational cash flows, inflows from sale of land & two subsidiaries provide comfort to debt servicing. Assessment of IBL’s profitability profile indicates improvement in HFY21 as evident from bottom-line which turned positive post two consecutive years of net losses.

Assigned entity ratings incorporate IBL’s strong investment portfolio with major investments in Searle and IBL Operations (Private) Limiteds. These two subsidiaries have historically been the major contributor to revenues in form of dividend income. Searle (rated ‘AA-/A-1’ by VIS Credit Rating Company) is one of leading local pharmaceutical firm with a diversified product portfolio & therapeutic area coverage.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 204) or the undersigned (Ext. 306) at 021-35311861-70 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Rating the Issue (June 2016)

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VIS Credit Rating Company Limited