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13.12.2006
The forthcoming bond issue by «Kompaniya Rikon» LLC assigned uaB+ (uaB plus) credit rating
"Credit-Rating", a nationally-recognized credit rating agency in Ukraine has today announced the assignment of the uaB+ (uaB plus) long-term credit rating to the forthcoming issue of the registered coupon bonds (of A series) by Kiev-based "Kompaniya Rikon" LLC ("the Issuer" or "the company") for the amount of UAH 10m with the 3-year original maturity. The main company`s activity is selling imported and domestic fish products all over Ukraine. In the course of the rating analysis the "Credit-rating" agency used Issuer`s financial reports for 2003-2005 and for 9 months of 2006, as well as other inside information furnished by the company.
The uaB issue rating reflects a higher default possibility than of the uaBB rating, though in this case the obligor`s capacity is adequate to pay its obligations in the Ukrainian financial market environment. This debt liability is more affected by the adverse changes in business, financial and economic conditions than debt liabilities with higher ratings. That may negatively affect the obligor`s capacity and willingness to fully and timely pay interest and principal on obligations. The "+" and "-" modifiers denote rating`s relative status within major categories.
Factors supporting the credit rating
- The Issuer is one of the leading Ukrainian fish products distributors. The volumes of imported sea products have been growing over the past few years (2005 saw 114% of imported fish as compared to 2004, January-August 2006 saw the import volumes amounted to USD 205m, which 216.3% exceeds that of the similar period of previous year).
- Growth in company`s major indicators over 2003 9 months of 2006, specifically the assets grew 5x (from UAH 4.7m to UAH 21.99m), the own capital increased 45x (from UAH 33.9 thousand to UAH 1.5m)
- Issuer`s 2003-2005 sales gains grew 2.2x to UAH 100.9m (9 months of 2006 saw UAH 98.97m), the size of undistributed profit as of 30 Sep. 2006 amounted to UAH 533.2 thousand.
Factors constraining the credit rating
- Company`s low indicators of financial stability (the financial independence ratio as of 30 Sep. 2006 amounted to 6.9%)
- The rated bond issue shall significantly increase the Issuer`s debt burden, in fact the issue size exceeds the own capital almost 7x as of 30 sep. 2006, the quarterly coupon payments, if bonds placed in full amount, will almost 2x exceed the EBITDA indicator for 3Q 2006.
- Issuer`s dependency as an importer on state regulating of foreign trade activity and on exchange rates fluctuations.
Information on all the credit ratings assigned in accordance with the Ukrainian national scale may be found in the REUTERS and BLOOMBERG information systems.
For further information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.com.ua
