PACRA maintains entity ratings of Fatimafert Ltd

November 6, 2018 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity ratings of Fatimafert Limited at ‘A-‘ for long-term and ‘A2’ for short-term, with a stable outlook forecasted.

According to the rating agency, the ratings of Fatimafert reflect the strength of its sponsor - Fatima Fertilizer Limited - offering dynamic business acumen and strong financial flexibility.

Fatimafert’s plants remained idle for most of the period due to suspension of gas, operated only for 85 days in entire CY17 as compared to 271 days in year CY16.

Despite the favorable domestic demand/supply scenario in the market, continued gas challenges entirely overshadowed the company’s operations.

As per the rating agency, the Company's financial profile suffer from a thin topline, majorly secured through DAP trading. Eroded margins accompanied by borrowings added much strain.

Moreover, eyeing for a sustainable yet value adding business profile, a group level business strategy has been laid out as per which Fatima Fertilizer Company Limited (FFCL) is merging Fatimafert Limited (its wholly owned subsidiary) with and into itself.

Company is expected to be dissolved by next couple of months, after regulatory approvals, the report said.

Fatimafert is a wholly owned subsidiary of Fatima Fertilizer Limited (Fatima). FatimaFert manufactures and markets urea under the brand name "Bubber Sher".

Fatima is a joint venture between two major business groups in Pakistan; Fatima Group (45%), Arif Habib Group (31%) and Fazal Group (15%). Fatima Fertilizer is a fertilizer complex.

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