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22.11.2007
Credit-Rating: Paper Mill Roma`s bond issue assigned uaBBB- (provisional)
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today assigned a long-term credit rating of uaBBB- (uaBBB minus) (provisional) to UAH20m 3-year registered coupon bonds (A series) issued by Zaporizhzhia-based Paper Mill Roma LLC (`Issuer` or `company`). The company`s primary activity is pulp and paper production. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 and 1Q-2Q2007 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. The plus (+) or minus (-) modifier denotes rating`s relative status within major categories.
Factors maintaining the credit rating
- The issue is underwritten by PKF Roma LTD and Roma-Invest LLC. The Issuer`s and underwriters` consolidated income in 2006 accounted for UAH120.6m, with net profit of UAH4.1m and EBITDA of UAH7.7m.
- The Issuer`s key figures grew in 2004-2006, specifically the EBITDA by 81 per cent to UAH2.2m and the net profit rose 2x to UAH1m.
- The demand for Issuer`s production, namely cash-register and ATM tapes, format paper etc.) has been growing over the past few years, with such a trend being expected to be further retained.
Factors constraining the credit rating
- The bond issue will significantly increase Issuer`s debt burden, in fact the issue size of UAH20m exceeds Issuer`s asset balance of UAH16.2m as of Jul.1, 2007 and is commensurate with Issuer`s and underwriters` consolidated stock of UAH20.6m.
- Modest Issuer`s performance indicators in 2004-2006 and 1H2007: the production profitability, the EBITDA and sales profitability have not exceeded 6, 5 and 2 per cent respectively.
- The Issuer purchase its principal raw material (which accounts for a.80 per cent of the product net cost) primarily from overseas suppliers, which imposes risks associated with currency rates fluctuations and state regulatory influence over the foreign trade.
Information on all credit ratings assigned in accordance with the National Scale may be found in REUTERS, BLOOMBERG and FTN MONITOR information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
