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20.02.2008
Credit-Rating assigns Odessa Cognac Factory`s upcoming bond issue uaBBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it assigned a long-term credit rating of uaBBB to UAH90m 3-year registered coupon bonds (M series) to be issued by Odessa-based Odessa Cognac Factory CJSC (`Issuer` or `company`). The rating outlook is positive. The company`s primary activity is production of alcoholic beverages. In the course of analysis Credit-Rating considered Issuer`s financial statements for 2002-2006 and 9M2007 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.
`Positive`outlook indicates that there is a possibility to upgrade the rating in the course of the year, on the condition that positive tendencies are maintained and that current risks are reduced.
Factors maintaining the credit rating
- The Issuer is the leading national cognac producer: in1H2007 it recorded the share of sales at 23 percent calculated in the volume of products and at 16 per cent calculated in cash.
- The Issuer is expected to join legally informal group of companies, which encompasses Image Holding Sbsd., Image Holding ApS JSC and TB Megapolis LLC, which provides the Issuer with the efficient sales system.
Factors constraining the credit rating
- The long-lasting production cycle (the ripening of cognac spirits is beyond 3 years), which will lead to increase in debt burden given the planned rise in Issuer`s sales.
- Growth of competition on the national cognac market accompanied by high industry`s dependency upon state regulatory policy.
- The majority of Issuer`s key figures have declined in January-September 2007 as compared to the similar year-earlier period, specifically the net proceeds tumbled 17.4 percent to UAH97.8m with the uncovered loss amounting to UAH(-)12m (January-September 2006 saw UAH9.6m of net profit).
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and Communication Department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
