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23.06.2005
uaBBB- credit rating assigned to upcoming bond issue of the Regional Pharmacy Holding company, Ltd.
Today independent rating agency Credit-Rating, Ltd. announced it has awarded a long-term “uaBBB-” credit rating to the issuance of registered interest bearing bonds (series A, B) to Regional Drug Store Holding company, Ltd. in the amount of 20 million UAH for a three-year circulation period. The company is involved in wholesale and retail of pharmaceutical production, medicine supply to clinics, polyclinics and other medical institutions.
Positive factors considered while assigning the credit rating:
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The issuer belongs to the group of companies Drug Store Holding which is one of the top ten leading distributors in Ukraine, it also has regional and city administrative bodies support in Donetsky region;
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The company’s sales net profit from monthly production at the end of 2004 surpasses the issuer volume 1.24 times;
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The sales volume for the last five years increased 3.7 times and reached 298.8 million UAH, while during the same time the pharmaceutical product wholesale & retail network was expanded;
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Modern technologies & business management systems are implemented in the company;
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The company has positive experience with previous emission (in the amount of 6 million UAH) in bonds allocation, service and paying off;
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Superior customer buying ability in regional markets (Donetsky, Dnepropetrovsky, Kyivsky, Nikolaevsky regions) and in the Crimean Autonomous Republic in comparison with other regions in Ukraine;
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Regional Drug Store Holding Managing Company, Ltd. (the parent company) provides security in profit payments and in paying off the bonds of the issuance, which is currently under rating review.
Negative factors considered while assigning the credit rating:
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The company had an operating loss in 2002 and 2003 (-589.3 million UAH and –393.9 million UAH accordingly), negative liquidity dynamics of the liquidity indexes and low profitability of the company in 2004;
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The pace of production cost increase exceeded the pace of net sales volume increase during recent years;
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Higher risks due to an ambitious development strategy which pre-planned pace of growth in products volume sales surpasses the forecast of pharmaceutical production market increase approximately two times;
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High level of dependency on companies in pharmaceutical industry on state regulatory and fiscal policy.
Ukrainian national scale ratings information is available on Credit-Rating public Web site at www.credit-rating.com.ua.
In order to get more detailed information please contact Olga Shubina, Kyiv (044) 490-25-50, 490-25-54, cr@credit-rating.com.ua
