KARACHI, Nov 23: JCR-VIS had earlier placed the credit ratings of A+ of TFC issues of Rs2.1 billion of Azgard on ‘Rating Watch – Developing’ status on June 6, 2007. Azgard had intimated its intention to merge with Pak American Fertiliser Limited (PAFL) and issue a long-term bond of $260 million (approximately Rs15.5bn) in the international capital markets to refinance the long-term loans of the company, including the rated TFCs to reduce stress on the capital structure of the company.

The programme also entails injection of additional equity of Rs2.5 billion in the last quarter of 2007 to settle some of the short-term debt, says a press release.

According to the new strategy the company has deferred its plans, including the issuance of the international bond due to unfavourable investment sentiments for Pakistani bonds abroad. However, the company has embarked upon a debt re-profiling programme in both PAFL and Azgard by raising funds in the local market, including a subordinated bond.

The rating agency expects the ‘Rating Watch’ status to be resolved during December 2007 when most of the re-profiling arrangements are in place.