Press Release

VIS Assigns Preliminary Rating to Proposed Islamic Commercial Paper of Mughal Iron & Steel Industries Limited
 

Karachi, June 30, 2021: VIS Credit Rating Company Limited (VIS) has assigned preliminary instrument rating of ‘A-2’ (A-Two) to proposed Islamic Commercial Paper (ICP) issue of Rs. 1.827b of Mughal Iron & Steel Industries Limited (MISIL). The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound.

The ratings assigned to MISIL take into account the company’s position amongst major players in the long steel sector of Pakistan. Product portfolio of the company comprises steel rebars, billets, girders and copper ingots. The assigned ratings take into account extensive experience of sponsoring family. The ratings draw comfort from sizeable scale of melting and re-rolling mill capacities, underpinned by installation of new furnaces and completion of balancing, modernization and replacement (BMR) of existing re-rolling mill.

MISIL is in process of issuing rated, unlisted, ICP for working capital requirements. Tenor of the instrument will be 360 days and will be redeemed at face value after adjustment of profit/loss upon presentation by last endorsee to the issuing paying agent on the maturity date. The indicative profit/discount rate is 6-month KIBOR plus 1.75% per annum. The instrument will be re-priced Bi-annually. Subsequent to issuance of ICP, gearing and leverage ratios are projected to remain stable on a QoQ basis as the impact of increase in borrowings is offset by higher equity base owing to receipt of remaining proceeds from rights issue after March 31, 2021.

MISIL has an outstanding entity ratings of ‘A/A-2’ (Single A /A-Two) and Sukuk-1 rating of ‘A+’ (Single A Plus).

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at info@vis.com.pk



Faryal Faheem Ahmed
Deputy CEO
VIS Applicable Rating Criteria: Rating The Issue (July 2020)
https://www.vis.com.pk/kc-meth.aspx

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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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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