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19.07.2007
Upcoming bond issue by Omega LLC assigned uaBB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaBB long-term credit rating to upcoming UAH50m 3-year issue of registered coupon bonds (A series) by Dnepropetrovsk-based Omega LLC (Issuer or Company). The company's principal activity is retail trade of foodstuff and non-foodstuff products. In the course of analysis Credit-Rating considered Issuer's financial statements for 2003-1Q2007 as well as other inside information furnished by the company.
A credit rating of uaBB is a speculative grade rating, indicating a debt liability that is the LEAST AFFECTED BY THE RISK OF NONPAYMENT of the principal and interest among speculative grade ratings. This rating indicates that the obligor may not be able to meet in full its commitments on the given debt liability on a timely basis in the event of adverse changes in the business, financial or economic conditions in the Ukrainian financial market environment. However, the possibility of nonpayment in the near future is considered to be low.
Factors maintaining the credit rating:
- The Issuer operates the Varus supermarket chain on the Ukrainian retail market, which has rapidly been growing over the past few years, with such a trend being expected to be retained;
- Issuer's key figures have grown over 2003-2006, in fact those of assets rose 4.1x to UAH90.7m with the net sales achieving 2.7x growth to UAH159.5m;
- The company has unveiled 4 new outlets of the Varus chain during 2003-2006. The chain's commercial premises grew 1.8x to 8.8K sq.m. with the monthly average gains per sq.m. in 1Q2007 having remained on the year-earlier notch amounting to USD753.
Factors constraining the credit rating:
- Low Issuer's indicators of financial strength with the financial independence ratio making up 0.053 as of Apr. 1, 2007;
- Low Issuer's profitability, accounting for 0.2% with the net profit being UAH295.1K;
- The planned issue will significantly increase Issuer's debt burden, in fact the consolidated payments of UAH8m in the first 4 coupon periods exceed Issuers 2006 EBITDA of UAH7m;
- Growing competition on the Ukrainian retail market.
Information on all the credit ratings assigned in accordance with the Ukrainian National Scale may be found in REUTERS, BLOOMBERG and FTN MONITOR Information Systems.
For further information, please contact:
Information and Analytic Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
