VIS Credit Rating Company Upgrades OBS Pharma’s Loan Rating to ‘A+(blr)’ with Stable Outlook

Karachi, VIS Credit Rating Company Ltd. (VIS) has elevated the Islamic Syndicated Financing facility rating for OBS Pharma (Private) Limited (OBS Pharma) to ‘A+(blr)’, reflecting the firm's good credit quality and stable economic outlook. This rating adjustment comes after the finalization of the loan amount to PKR 5,125 million, down from the initially proposed PKR 5,250 million.

According to VIS Credit Rating Company Limited, this final rating of ‘A+(blr)’ signifies OBS Pharma’s strong market presence and its history of successful acquisitions, notably the purchase of 12 pharmaceutical brands and a Lahore-based manufacturing facility from Bayer A.G. The acquisition, completed in July 2023 for Rs 6,825 million, was funded through a combination of 75% debt financing (PKR 5,125 million) and 25% equity (PKR 1,700 million) from its 80% parent company Aitkenstuart Pakistan (Pvt.) Limited, under West End 16 Pte Limited, Singapore.

The financial structure includes a seven-year tenured Islamic financing facility with an 18-month grace period, followed by a redemption in 22 equal installments starting from the 21st month post disbursement. Security for the loan encompasses a comprehensive collateral package over OBS Pharma’s and Aspin Pharma (Pvt.) Limited's assets, alongside a corporate guarantee from Aitkenstuart Pakistan.

OBS Pharma’s strategic market positioning and expansion plans, particularly in women's healthcare, are expected to drive revenue growth and improve profit margins. This is supported by a reduction in raw material costs and an optimized supply chain for Active Pharmaceutical Ingredients (API). The stable outlook on the rating reflects VIS’s confidence in OBS Pharma’s future performance and financial stability.