Financial news

Ratings review for 12.10.2007

Moody's assigned rating "B2" to DFEC

International rating agency Moody's assigned a long-term corporative rating "B2" with change forecast "stable" to "Donbass fuel-energy company" (DFEC).

This is informed in the message of DFEC. Ukrainski Novyny possess the text of this message. According to the opinion of the agency, vertical integration of DFEC permits the company to control the quality and reliability of its production chain and also to manage efficiency and productivity successfully.

The obtained rating says for strong positions of DFEC as the only private vertically integrated energy company in Ukraine and also takes into account quite high risk level of the company due to new regulative basis and significant influence of the state to coal and energy markets.

Moreover, the rating reflects a convincing financial results of DFEC, provided with formation of money flows and indexes of holdings, measures on increase of production efficiency, which are supported by prices growth tendencies both in coal and energy markets.

"Acquiring of long-term credit ratings — is the first step of DFEC on the way to international markets. It gives secure warranties of quiet to clients and prospective investors confirming once again a stability and reliability of our company", — said Yuriy Ryzhenkov, financial director of DFEC.

As the agency informed, in February 2006 the company  System Capital Management found DFEC to perform management of enterprises on electric power production. DFEC unites 15 enterprises, including energygenerating company "Vostokenergo", energy supplying companies "Service-Invest", "EES "Gorenergo". DFEC also comprises mines "Pavlohradugol", "Komsomolets of Donbass", LLC "Mospinsk coalprocessing enterprise".

RA "Credit-Rating" assigned cedit rating "uaB" to LLC "Master Finance"

Independent rating agency "Credit-Rating" announced about assigning of credit rating "uaB" to LLC "MASTER FINANCE" (Dnipropetrovsk). Main activity area of the company is a creation of Funds of operations with real estate for financing of housing estate construction "Western wall" (I phase I stage) in Dnipropetrovsk and housing estate with public function objects "Pioneer" in Mariupol of Donetsk region. In the course of analysis the agency used a financial accounting of LLC "MASTER FINANCE" for 2006 and I half of 2007  and also internal information provided by the company in the course of rating process.

Borrower or a separate debt instrument with rating "uaB" is characterized by low solvency in comparison with other Ukrainian borrowers or debt instruments. Very high dependence of solvency level from influence of unfavorable commercial, financial and economic conditions.

Factors supporting credit rating level:

• LLC "MASTER FINANCE" cooperates with more than 10 Dnipropetrovsk enterprises, united under trade mark "MASTER" and engaged mostly in trade-investment field with experience, in particular, in dwelling houses construction in Dnipropetrovsk (total area more than 33 thous. sq. m.), trade centers in 8 regional centers of Ukraine (total area more than 27 thous. sq. m.), hotel complexes;
• the company компания performs realization of projects of construction of residential and nonresidential real estate in Mariupol of Donetsk region and Dnipropetrovsk, prices and demand for which grow in the last years.

Factors, restricting credit rating level:

• informational closure and non-transparency of the company;

• activity of the company in the frames of cooperation with enterprises, united under trade mark "MASTER", has a risk of redistribution of the enterprise resources without count of its interests;
• unsettlement and changeability of the system of legislative regulation and taxation operations connected with construction and financing attraction.

Source: Information agency Сbonds