PACRA Maintains Instrument and Entity Ratings of Fatima Fertilizer Company Limited

November 2, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained the debt instrument ratings of Fatima Fertilizer Company Limited at ‘AA-‘ for long term, with a ‘stable’ outlook forecasted.

PACRA has also maintained the entity ratings of Fatima Fertilizers Limited at ‘AA-‘ for long-term and ‘A1+’ for short-term with a stable outlook forecasted.

According to an official press release from PACRA, the ratings reflect strong business profile of the company on the back of diversified product mix.

“Secure supply of gas from Mari field together with lower feed stock price (under fertilizer policy -2001 up till 2021), represents inherent strengths of the company compared to its peers,” said the agency.

In line with the industry, company revived from the supply surplus situation due to oversupply in the domestic market. Plus, the latest domestic supply/demand scenario is favorable, increased urea prices, provided additional cushion to the business in enhancing its margins.

“Eyeing for a prolific business model, Fatima Fertilizer has proposed merger with its wholly owned subsidiary – Fatimafert along with the acquisition of all five fertilizer plants of its associate – Pakarab Fertilizer Limited including Ammonia, Urea, Nitric Acid, NP, CAN and clean development mechanism. Regulatory approvals are being sought,” divulged the rating agency

Post-acquisition, Fatima Fertilizer tends to become a prominent supplier of CAN & NP with the overall nameplate capacity of 2.6 million Metric ton/year. Fatima Group has also ventured an undertaking to secure gas supply to Pakarab by laying gas pipeline, revealed PACRA.

PACRA further apprised that the ratings are dependent upon the company’s ability to absorb debt profile of the proposed acquisitions. Revival of the Pakarab's plants, acquired by Fatima Fertilizer is crucial.

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Posted on: 2018-11-02T11:07:00+05:00

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