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18.07.2008
Credit-Rating upgrades Yenakiyevo Iron and Steel Works to uaA
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it upgraded to uaA from uaBBB the long-term credit rating assigned to Donetsk Oblast-based Yenakiyevo Iron and Steel Works OJSC (`company`). The outlook on the rating has been changed to stable. The company`s principal activity is production of steel and cast iron. To revise the rating Credit-Rating considered company`s financial statements for 2007 as well as its other inside information.
An obligor or a debt liability with uaA credit rating is characterized with the HIGH STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is susceptible to adverse changes in commercial, financial and economic conditions.
Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.
Factors maintaining the credit rating
- The company is incorporated with the vertically integrated Metinvest mining group.
- Growth in the EMZ (Yenakiyevo Iron and Steel Works) group`s production output, specifically in 2007 the group recorded a 9.3% increase in steel production - to 2.8m metric tons.
- The company`s key indicators improved over 2006-2007.
- Low dependency of the EMZ group upon external borrowings (the ratio of the group`s consolidated debt to EBITDA accounted for 1.05 in 2007).
Factors constraining the credit rating
- The risks imposed by the company`s corporate governance, prompted by significant volumes of transactions with affiliated parties and absence of consolidated financial statements.
- High specific gravity of intermediate products in the EMZ group`s production structure, which makes the company more vulnerable to price fluctuations in the global market of ferrous metals.
- The anticipated investments, which may limit the company`s free cash flow.
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
