IBI-Rating has affirmed the credit rating of bonds of «AGROFIRMA «ORSHIVSKA» LLC

IBI-Rating informs on the affirming of the long-term credit rating of interest A Series bonds of «AGROFIRMA «ORSHIVSKA» LLC at uaBBB grade with a «stable» outlook. The bonds with a par value of UAH 100 mln. were issued to finance the purchase of crop protection agents, mineral fertilizers, seeds, as well as for payment of agricultural services.

«AGROFIRMA «ORSHIVSKA» LLC is a part of «Svarog West Group» one of the leading effectiveness of crop agro-industrial corporation. The land bank of the corporation amounted to 80 thousand ha, the main crops are cereals, legumes and sugar beet. During the rating process, IBI-Rating agency took into account that «AGROFIRMA «ORSHIVSKA» LLC’s is forming as a part of «Svarog West Group», however, the credit rating of the bonds was updated based only on the Issuer’s creditworthiness (excluding consolidated financial indicators).

The area of arable agricultural lands of «AGROFIRMA «ORSHIVSKA» LLC in Chernivetska oblast is exceeds 4 thousand ha. The activities of the Issuer, like other agricultural enterprises, are seasonal and sensitive to the impact of natural and climatic conditions.

According to the results by 2018 «AGROFIRMA «ORSHIVSKA» LLC received UAH 110 470 thousand of net income, against UAH 175 065 thousand for previous year. As a result of 2018, the net loss amounted to UAH 32 354 thousand, which was primarily due to a significant amount of financial expenses, while operating activities were profitable. The amount of retained earnings decreased to UAH 35 488 thousand as of December 31, 2018.

Issuer's debt is formed by obligations on interest-bearing bonds (UAH 100 000 thousand) and bank loans (UAH 108,7 thousand). Taking into account the long-term nature of a significant part of the debt (the conditions for issuing bonds do not provide for the possibility of presentation to early redemption), the level of debt burden of the Issuer is assessed as acceptable.

In order to carry out the analytical research the materials obtained from «AGROFIRMA «ORSHIVSKA» LLC have been used, including: the annual financial statements for 2016-2018, parameters of the A series bond issue, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.

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