uaA- credit rating assigned to upcoming bond issue of the JSLC “Ukrchampignon”
June 6, 2005 -- Independent rating agency Credit-Rating on Monday awarded a long term “uaA-” rating to the preplanning issuance of registered interest bearing bonds of “Ukrchampignon” Joint Stock Limited Company in the amount of 10 million UAH for a 2 year period of circulation. The main activities of the company are production and processing of champignons and other agricultural products.
Positive factors that were taken into account in the rating:
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“Ukrchampignon” works in a growing market and it successfully unites primary resources and agricultural production processing;
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The issuer belongs to the group of “Veres” companies and it provides the company effective production and sales management as well as sale of the produce under well-known brand names;
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“Ukrchampignon” net sales volumes for 2003-2004 increased 8.8 times and reached 46.5 million UAH with net profit for 2004 of 12.76 million UAH;
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the issuer has positive experience in bonds issuance and service; its debt load including this issuance is not excessive for the company;
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issuer is less sensitive for seasonal factors in comparison to other agricultural production producers and processors;
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high standards of the issuer’s operational efficiency; net sales and own capital profitability for 2004 was respectively 27 percent and 35.6 percent.
Negative factors that were considered in the rating:
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high dependency of the issuer on financial and production activity risks of the “Veres” group as well as on the risks that are caused by the possible production agripower reallocation among the companies group without taking into consideration the interests of the issuer;
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“Ukrchampignon” is a new company; it has been working effectively only for the last 3 years on the market;
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unstable legislative basis that regulates activities in the field of agricultural production and processing can negatively influence financial results of the company and may make strategic plan realization more complex.