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10.10.2006
The uaBB credit rating assigned to the planned bond issue of "Agro-souz", Ltd
The independent rating agency "Credit Rating" has today announced the assignment of the uaBB credit rating to the issue of the registered interest-bearing bonds (A series) of the Dnepropetrovsk-based LLC "Manufacturing firm Agro-soyuz" for the amount of UAH 10 mln. with the 3 years maturity term. The company is the biggest Ukrainian manufacturer of the farming machinery.
Factors, supporting the credit rating level
- The LLC "MF Agro-soyuz" is one of the biggest Ukrainian manufacturers of the farming sowing machinery. The company enters the markets of the CIS countries (the Russian Federation and Kazakhstan), where the company's representative offices operate.
- The Issuer is affiliated with the Agro-soyuz group of companies, which is specialized in agricultural innovations. The above mentioned factors provide the company with the access to innovative technologies and to optimization of business processes.
- Growth rates of the Issuer's performance over the past 3 years, in fact the main productive capacity increased 6x, the power inputs per product unit decreased by 12.5%, which resulted in 2.5x decrease in cost price of a product unit.
- The indices of financial and economic activity of the LLC "MF Agro-soyuz" have improved due to changes in the purchase policy and increase and effectiveness of manufacturing processes in 2005 as compared to the previous years, namely the company's incomes from the product sales increased 2.2x as compared to 2004 (to UAH 131.5 mln), the profitability of activity increased to 22.7%, the liquidity and turnover have also improved and remain currently on sufficiently high level.
- The Issuer's authorized capital (UAH 15 mln) exceeds 1.5x the planned volume of bond issue (UAH 10 mln.)
Factors, restricting the credit rating level
- Risks of the cash flows and of the major funds redistribution within the group of companies, without taking into account the Issuer's position;
- The 2002-2004 company's detrimental performance;
- The Issuer's development strategy for 2006-2009 envisages a significant increase of debt obligations
- The risks of future decrease of solvent demand in the Ukrainian farming machinery market, entailed by the price growth for material and technical resources and farming manufacturers' shortage for vacant working funds.
The information on all the credit ratings assigned in accordance with the Ukrainian national scale can be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact
Information and analytic department
Sergei Rozumyak +38 044 490 25 50 SRozumyak@credit-rating.com.ua
