PACRA Assigns Initial Entity Ratings to Allawasaya Textile & Finishing Mills Limited
The ratings reflect Allawasaya Textile & Finishing Mills Limited's (The Company) association with three industrial families of Multan and demonstrated support of sponsors. Besides the company, sponsors have presence in the oilseed extraction industry and textile value-chain. The company has relatively small size, lower margins, and limited profitability, as compared to peers. The rising interest rate environment could put further pressure on margins The Company has plans to undertake BMR in the current year to add and replace its spindles to increase efficiency and improve margins. The financial profile of the company is characterized by moderate leveraging and adequate coverages. The entire debt structure of the company is comprised of short-term borrowings.
The ratings are dependent upon the sponsor support and management's ability to improve margins, profitability and financial profile of the company. This includes keeping the debt levels manageable and improve the company's competitive position in the industry.
Allawasaya Textile and Finishing Mills Limited’s (The Company), is a listed company engaged in manufacturing and sales of different varieties of yarn. The Company operates a single unit of spinning of 25,000 spindles in Multan. The company fulfills its energy needs in-house and has a production capacity of 4.2MW. The Company is primarily owned by Mian Tauqir Family (37.6%), Jamil Family (35.4%) and Maqbool Family (25%), while rest is owned by the friends of the families.
Overall control vests in an eleven-member board of directors, which includes four non-executive directors and three independent directors. Three members represent Tauqir family, two members including the Chairman, Mian Muhammad Jamil, represent Jamil family while two members including the CEO, Mian Tanvir Ahmed, represent Maqbool Family. The CEO carries the extensive experience of the textile industry and is supported by an experienced management team.