The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (08-March-2006)
    PACRA Assigns Short-Term Rating Of ‘A1’ To The Secured TFCs Of
Maple Leaf Cement Factory Limited (MLCFL)
 

 
Analyst
Moin Khalid
(+92-42-586 9504)
moin@pacra.com

 

 

 









 

 

 



 

 

 

 

 

 

Disclaimer
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The Pakistan Credit Rating Agency (PACRA) has assigned a short-term rating of ‘A1’ (A One) to the secured TFCs of PKR 250mln of Maple Leaf Cement Factory Limited. The rating denotes a strong capacity for timely repayment of financial obligations.

The rating reflects the improving trend in profitability of MLCFL on the back of robust cement demand and firm cement prices. The rating also factors in the strong cashflow generation capacity over the remaining tenor of TFCs. As only one installment amounting to PKR 45mln, payable in July 06 is outstanding, the TFC issue has been assigned a short-term rating of ‘A1’.

About the TFC Issue: TFCs of PKR 250mln were issued in Jul 02 to meet the cost of a new coal grinding system.  The tenor of the instrument is four years and the profit rate is five years’ PIB rate + 250bps subject to a floor of 15.25% and a ceiling of 17.75%. While the profit is payable semi-annually, the redemption of the principal is in six equal installments commencing in Jan 04. The issue is secured by way of a first pari passu charge on the present and future fixed assets (excluding land and buildings) of the company.

About the company: Maple Leaf Cement Factory Limited (MLCFL) is one of the largest cement factories in Pakistan, with an overall annual production capacity of around 1.9mln tons.  The company has a diversified product range and is one of the few cement companies in Pakistan capable of producing grey, white, sulphate resistant and low alkali cement.

MLCFL is a subsidiary of Kohinoor Textile Mills Limited, holding 50.13% of the company’s issued subscribed and paid-up capital. The Kohinoor group is one of the leading textile manufacturers of the country. While effectively family controlled, the company is run by professional management. The main sponsor, who is also the chairman of the company, is a leading industrialist and currently holds the office of Chairman of All Pakistan Cement Manufacturers Association (APCMA). He is mainly responsible for making policy decisions and providing commercial guidelines to group companies.
 
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