PACRA gives BB/B entity ratings to Maple Leaf Cement

PACRA gives BB/B entity ratings to Maple Leaf Cement
Published: 19 July 2010

The Pakistan Credit Rating Agency (PACRA) said it assigned BB long-term and B short-term entity ratings to cement maker Maple Leaf Cement Factory Ltd (MLCFL).

Meanwhile, the company’s Sukuk issue of PKR8bn (USD93.5m/EUR72.1m) was assigned a BB+ rating.

These ratings denote that there is a possibility of credit risk developing, particularly as a result of adverse economic changes over time.

MLCFL’s ratings reflect the high business risk of the company emanating from the challenging industry dynamics, further accentuated by the emerging capacity overhang in the sector. Meanwhile, the financial profile of the company remains under pressure due to the highly leveraged capital structure and distressed cashflows, though the recently concluded debt restructuring would provide short-term relief. These ratings incorporate the company’s diversified product mix and establish brand name in the local market.