VIS Assigns Initial Entity Ratings to Mehboob Steel Pipe Industry - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- August 27, 2019 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of 'BBB-'/A-2' (Triple B Minus/A-Two) to Mehboob Steel Pipe Industry (MSPI). The medium to long-term rating of 'BBB-' denotes adequate credit quality coupled with reasonable and sufficient protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of 'A-2' denotes good certainty of timely repayment, sound liquidity factors and good company's fundamentals. Outlook on the assigned ratings is 'Stable'.

MSPI manufactures MS Steel tubes and pipes for various industries with annual production capacity of 60,000 metric tons per annum. Shareholding of the firm is mainly vested with the sponsoring family of four real brothers which are actively involved in the day to day affairs of the company. The firm generates 100% sales through local customers while the sales growth during last three years was based on volumetric increase while gross margins were also impacted positively.

The firm has no plan of CAPEX in near future as capacity utilization remains around 50% and...