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The Pakistan Credit Rating Agency Limited
Press Release

Date
28-Mar-21

Analyst
Sehar Fatima
sehar.fatima@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 Withdraws Entity Ratings of Island Textile Mills Limited

Rating Type Entity
Current
(28-Mar-21)
Previous
(28-Mar-20)
Action Withdraw Maintain
Long Term - BBB+
Short Term - A2
Outlook Negative
Rating Watch - Yes

Subsequent to the management's decision to discontinue the entity ratings of Island Textile Mills Limited, PACRA withdraws the entity ratings of Island Textile Mills Limited with immediate effect.
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About the Entity
Island Textile Mills limited (the Company), incorporated in 1970, is a public listed company engaged in the manufacturing and sale of different varieties of yarn. Tata family acquired the Company in the early 80s and took charge of its management. The corporate office of the Company is located at Textile Plaza, M.A. Jinnah Road, Karachi, whereas, vicinity of the plants is in Kotri Industrial Estate in the Province of Sindh. Until 2015, the Company was operating with a single manufacturing unit with a designed capacity of 19,200 spindles - Unit 1. However, in 2016, in line with the emerging business needs, the Company made an expansion and installed its second state-of-the-art unit with a capacity of 26,784 spindles – Unit 2. Thereby, current total installed capacity of the Company stands at 45,984 spindles.

The CEO, along with other family members collectively own the majority (77%) shares of the Company. The remaining shareholding is held by mutual funds (7%) and the general public (7%). The overall control of the Company vests in seven members (board of directors) including the CEO – Mr. Shahid Anwar Tata. Mr. Mazhar Valjee is the Chairman of the board. He has diverse experience in the field of textile sector, bringing specialized and comprehensive experience and knowledge on the board.

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.