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15.10.2007
Credit-Rating assigns Rovex`s bond issue at uaBB+
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned UAH50m 3-year issue of registered coupon bonds (B series) by Ternopil-based Rovex LLC (`Issuer` or `company`) a long term credit rating of uaBB+ (uaBB plus). The company`s principal activity is wholesale and retail trade of foodstuff and nonfoods products and of alcohol and tobacco. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2003-2006 and 1H2007 as well as other inside information furnished by the company.
An obligor or a debt liability with uaBB credit rating is characterized with the LOWER THAN SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is strongly affected by adverse changes in commercial, financial and economic conditions. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The Issuer is a basic company of the group, being one of the biggest wholesale trader in Ternopil Oblast and operating Torgoviy Mir supermarket chain, which account for 21 outlets of overall 10.9K sq.m.
- Issuer`s key figures have been growing in 2003-2006 and 1H2007, in fact the company`s assets grew 4.7x to UAH97.8m; the equity grew 11.2x to UAH16.8m; the net sales gains rose 2.6x to UAH398.2m in 2003-2006 with the undistributed profit amounted to UAH3.4m as of July 1, 2007.
- The growth perspectives for the retail trade are retained taking into account the underdeveloped wholesale and retail markets of western Ukrainian regions.
Factors constraining the credit rating
- The Issuer`s debt burden including the bond issue of UAH50m and existing net debt of UAH17.7m will rise to UAH67.7m which 4x exceeds Issuer`s equity as of July 1, 2007. Moreover, the Issuer also plans to attract more UAH200m at the expense of project financing.
- Issuer`s low performance indicators, namely the sales profitability and EBITDA, which made up 0.4 and 1.9 per cent respectively in 1H2007 (2006 saw Issuer`s sales profitability and EBITDA of 0.1 and 1.5 per cent respectively).
- Growing competition on the Ukrainian retail market, specifically in western regions.
Information on all 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
