Karachi: VIS Credit Rating Company Limited has assigned a preliminary rating of ‘A-1(plim)’ to the upcoming short-term Sukuk of OBS Pharma (Private) Limited, signaling a strong likelihood of timely financial obligations and robust liquidity.
According to VIS Credit Rating Company Limited, the proposed Sukuk, valued at Rs. 1,500 million, is set to enhance OBS Pharma’s financial agility. The short-term instrument, unlisted and privately placed, will have a six-month tenure from the first drawdown, featuring a markup rate tied to the 6-month KIBOR plus 1.15%. The issuance aims to bolster liquidity while adhering to a defined floor and cap set by the Shariah Advisor, with scripless securities issued at a face value of Rs. 1,000,000 each.
Established in 2022 as a Special Purpose Company to acquire select pharmaceutical brands and a manufacturing facility from Bayer AG, OBS Pharma is a significant player in Pakistan’s pharmaceutical sector, heavily owned by Aitkenstuart Pakistan (Private) Limited. The sector is characterized by stable demand and low sensitivity to economic shifts, supported by factors like population growth and disease prevalence. Despite regulatory price caps impacting profitability, recent deregulations have allowed more flexibility in pricing non-essential medicines, bolstering the sector’s business risk profile.
OBS Pharma’s strategic focus on women’s healthcare and dermatology has positioned it strongly in the market, with flagship products including Ciproxin and Primolut N. Financially, the company reported a robust performance in the previous year, although challenges in production capacity and third-party outsourcing have affected profitability. Moving forward, OBS Pharma plans to internalize manufacturing to improve margins and efficiency.
The Sukuk’s backing by a corporate guarantee from parent company Aitkenstuart Pakistan underscores the strong support structure for OBS Pharma’s financial strategies, promising stable returns and financial health as it navigates market dynamics and internal growth strategies.