Press releases

print 29.12.2008

Credit-Rating revises outlooks on ratings assigned to Fozzy-Food LLC`s and Furshet CJSC`s bonds

Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it changed to negative from stable the outlook on uaA- (uaA minus) long-term credit rating assigned to Kiev-based Fozzy-Food LLC (`Fozzy`) and on uaA- (uaA minus) long-term credit rating assigned to Fozzy`s UAH100m 5-year registered coupon bonds (series B). Credit-Rating has also changed to negative from stable the outlook on uaAA- (uaAA minus) long-term credit rating assigned to registered coupon bonds (series E) issued by Kiev-based Furshet CJSC (`Furshet`) for the amount of UAH200m with the 3-year original maturity and assigned a long-term counterparty rating of uaAA- (uaAA minus).

An obligor or a debt liability with uaAA credit rating is characterized with the VERY STRONG creditworthiness as compared to other Ukrainian obligors or debt liabilities.

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.

A plus "+" and a minus "-" signs indicate intermediary categories compared to the standard categories (grades).

Negative outlook indicates that there is a possibility to downgrade the rating in the course of the year, on condition that negative tendencies are retained and current risks are realized.

The revision of the outlooks exhibits Credit-Rating`s expectations of rising debt burden on the companies due to significant specific gravity of obligations denominated in foreign currencies under devaluation of the national currency. Thereat the amount of companies` foreign currency-denominated earnings remains low.

Factors maintaining the credit rating assigned to Fozzy

Leading positions of Fozzy Group, which incorporates Fozzy-Food LLC in Ukraine`s retail sector.
Expansion of Silpo chain, which embraced 148 supermarkets in all Ukraine`s regions (Fozzy-Food is the operator of 35 Silpo supermarkets located in the city of Kiev).

Factors constraining the credit rating assigned to Fozzy

Complicated group`s structure and absence of audited consolidated financial statements.
High debt burden: according to the totals of the year ended June 30, 2008 the ratio of Fozzy`s debt (of UAH271.6m) to the EBITDA (of UAH34.7m) was 7.8.

Factors maintaining the credit rating assigned to Furshet

Rapid growth of sales of Furshet group recorded over the past few years, in fact according to 2007 totals, the net consolidated income advanced by 45% to UAH3,520.2m, and the EBITDA by 67% to UAH256.0m.
Expansion of Furshet chain, which embraced 88 supermarkets located in Ukraine and 6 supermarkets located in Moldova.
Leading market positions of Furshet group.

Factors constraining the credit rating assigned to Furshet