KARACHI: JCRVIS Credit Rating Company Limited (VIS), in response to the latest equity injection and strong corporate governance, has upgraded the entity ratings of Agha Steel Industries Limited from ‘A-/A-2’ (Single A Minus/A-Two) to ‘A/A-2’ (Single A/A-Two).
Rating of the Islamic TFC, Sukuk has also been upgraded from ‘A’ (Single A) to ‘A+’ (Single A). Outlook on the assigned ratings is ‘Stable’. Agha Steel is the only graded large steel sector company with outstanding Sukuk bonds floated on the secondary market counters of Pakistan Stock Exchange (PSX).
Long Term entity rating of A reflects good credit quality, with adequate protection factors. As per the rating agency, risk factors may vary with possible changes in the economy. Short Term Rating of A-2 indicates good certainty of timely payment, sound liquidity factors, and company fundamentals. Access to capital markets is good.
The Company’s recent success story at PSX for being the largest graded steel sector IPO in the history of Pakistan was one of the major factors that contributed towards entity rating upgrade that was last conducted in October 18, 2019.
Agha Steel Industries Limited (ASIL) is amongst the top-tier players in the long steel sector with an installed capacity of billets and reinforcement bars (rebars) at 450,000 metric tonnes and 250,000 metric tonnes respectively. The company has initiated an expansion plan and the amount raised in recently placed IPO is planned to be utilised for increasing the capacity of rebars upto 650,000 metric tonnes per annum, which is expected to come online by August’2021.
Agha Steel is setting up first of its kind, a state-of-the-art Micro Mill Danieli (Mi.Da) project in Karachi, which will dramatically shorten the duration of the steel-making process and result in lower costs, higher turnover and reduced energy use.
The company uses the latest European electric arc furnace technology to produce billets, a transitional steel product that can either be turned into steel bars used in construction or transformed into wire rods to manufacture electrical appliances.
Unlike most local steelmakers that use the traditional induction furnace for melting scrap, Agha Steel has invested in a high-efficiency and environment-friendly electric arc furnace. It recently increased its billet-making capacity from 250,000 metric tonnes to 450,000 metric tonnes a year.
Copyright Business Recorder, 2021
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