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The Pakistan Credit Rating Agency Limited
Press Release

Date
01-Mar-19

Analyst
Raniya Tanawar
raniya.tanawar@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA assigns Initial Entity Ratings to Meskay & Femtee (Pvt) Limited

Rating Type Entity
Current
(01-Mar-19)
Action Initial
Long Term BBB
Short Term A2
Outlook Stable
Rating Watch -

The ratings reflect long presence of the sponsors in rice industry and prominent name in the rice export market. The family has a rich experience of the rice export market and also has stake in the rice market in addition to Meskay. Meskay has expanded its capacity; the two new lines have been recently commissioned, eventually strengthening the business profile of the company. The growth in topline and persistent profitability is the company’s forte. There is an element of devaluation impact, as well. The equity has also improved due to internal generation of funds. The second generation is playing a vital role in the growth of Meskay. The challenge remains in the cyclical nature of the rice business. The governance is concentrated in family's hand, whereas corporate structure may evolve. The working capital cycle is business-oriented, creating need for short term borrowing over a relatively longer horizon.
The ratings are dependent on Meskay's prominence in the industry and financial profile of the rated entity. Any dilution in business volume and profits would be considered negative.

About the Entity
Meskay & Femtee (Pvt.) Limited is a Private Limited company established on 1993. The company is engaged in processing and trading business of rice. Meskay & Femtee is one of the largest exporters of rice in the domestic landscape. In 1998, Meskay and Femtee (Pvt.) Limited became a full-fledge milling business. Meskay & Femtee Pvt Limited is owned by four individuals. Mr. Teka Mal( (46.80%), two sons, Mr. Mukesh and Mr. Manoj holds ~22.4% each while Mrs Sundari, Wife of Mr. Teka Mal, holds the remaining. Meskay’s board comprises four members who are also shareholders of the company.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.