VIS Maintains Entity Ratings of Khalid Shafique Spinning Mills Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- June 11, 2021 (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 maintained the entity ratings of Khalid Shafique Spinning Mills Limited (KSSML) at 'BBB/A-2' (Triple B/A-Two). The medium to long-term rating of 'BBB' denotes adequate credit quality with reasonable and sufficient protection factors. Moreover, risk factors are considered variable 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. Outlook on the assigned rating has been revised from 'Rating Watch-Negative' to 'Stable'. Previous ratings action was announced on April 14, 2020.

KSSML is a spinning unit, majority owned and managed by the sponsoring family. The ratings assigned take into account increase in revenue and profitability during 9MFY21 underpinned by higher volumetric sales and favourable yarn prices. Overall liquidity indicators have remained adequate. The ratings also factor in improvement in debt coverage ratios supported by higher cash flows generation during 9MFY21. Gearing stood slightly lower as the impact of mobilization of long-term debt was more than offset by the decrease in short-term borrowings; while debt leverage ratio remained largely...