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15.08.2007
Upcoming bond issue by VVS-LTD assigned uaBBB credit rating
Credit-Rating, a nationally-recognized credit rating agency in Ukraine has today announced the assignment of uaBBB long-term credit rating to upcoming UAH200m issue of registered interest bonds (A and B series) by Kiev-based VVS-LTD LLC (`Issuer` or `Company`) with the original maturity of 5 years for the A series and 4 years for the B series. The company`s principal activity is the sale of national and foreign pharmaceutical products on the territory of Ukraine. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 and 1Q2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.
Factors maintaining a credit rating:
- VVS-LTD has a 13-years experience in the Ukrainian market of pharmaceutical products and is one of the leading companies in the market (the fourth place by the 2006 sales volumes). Over 2002-2006 and 1Q2007, the Issuer`s market expansion increased from 6.7% to 13.4% (in money terms);
- The company has a wide regional network consisted of 14 module regional storehouses and 16 representatives. The Issuer has the largest share of pharmaceutical retailers in Ukraine (78.8%);
- Growth of the key operating indicators over 2002 2006: assets increased by 5.1 times to UAH 357.8m, net sales increased by 3.5 to UAH 704.8m, the equity increased by 33.9 to UAH 68.1.
Factors constraining a credit rating:
- The bond issue will intensify the debt load: amount of issue exceeds the equity by 2.9 as of April 01, 2007 (UAH 68m); annual interest payments amount to UAH 30m or by 3.1 more compared to the EBITDA in 2006 (UAH 9.8);
- The Issuer had negative cash flows from operating activities over 2005-2006;
- The Issuer`s ambitious development strategy: growth rates of the planned sales volumes exceed growth rates of the pharmaceutical market under the conditions of the increased competition.
Information on all the credit ratings, assigned in accordance with the Ukrainian National Scale, may be found in the 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
