April 13, 2022 (MLN): Agha Steel Industries Limited plans to raise Rs2 billion (inclusive of a green shoe option of Rs500 million) via a Rated, Secured and Privately Placed Sukuk with the option of listing under chapter 5C of the PSX rule book in the ongoing year (expected drawdown in June’22), a press release issued by VIS said.
The proposed Sukuk has been assigned the preliminary rating of A (Single A) by credit rating agency VIS.
As per the rating agency, the instrument shall have a tenor of fifteen months from the first draw down date, with a call option being available after one year.
Proceeds from the issuance will be utilized for settlement of conventional short term financing facilities up to Rs. 1.5b and to finance the ongoing capital expenditure of the company.
Profit will be paid on a quarterly basis at a rate of 3 Months KIBOR + 125 bps, with initial payment due at the end of three months from the first draw down date. Principal bullet repayment will be made on the 15th month from the date of the issue.
Assigned ratings factor in the security structure of the instrument encompassing first joint pari passu hypothecation charge over all present and future current assets of the Company with 25% margin, personal guarantees of sponsor directors of the organization, and ranking charge over present and future fixed assets of the Company with 25% margin, VIS said.
In addition, the Sukuk rating remains dependent upon projected improvement in liquidity profile and leverage indicators, for which timely completion of the expansion project is considered important, it added.
