In September, 2011 the analytical service of RA “Expert-rating” performed rating research on Private joint stock company UFC (USREOU code 33780390). On September, 16th the rating committee of RA “Expert-Rating” decided to assign credit rating according to the national scale at the level uaA to A series of the planned issue of bonds for total amount of UAH 25 m by Private joint stock company UFC.

Making decision on assignment of investment grade credit rating, RA Expert Rating was guided by the
following conclusions:
1. UFC Group of Companies has considerable market share of trade in fruit in Ukraine. By Agency estimations, company share over the last 5 years in the market of bananas fluctuated from 66 to 39 %. For H1 2011 revenue of UFC grew on 63 % in comparison with the same period of 2010. In October, 2011 the Issuer starts container transportation of bananas that should affect positively both its revenue, and key return indicators, and also to reduce negative influence of UAH devaluation risk on the credit status of the Issuer.
2. In H1 2011, the Group of Companies generated EBITDA in the amount of USD 9,2 m., and the shareholder equity of the Group by only 44% covered UFC liabilities. The situation was smoothed by that fact that approximately 37% of credit indebtedness was due to UFC founders. In such conditions, according to Agency, the Issuer can attract USD 3-4 m. without impairing the solvency. Also the Agency has established that the Group of Companies at the beginning of Q3 2011 possessed liquid assets in the amount of UAD 1,6 m that ensured sufficient level of Company solvency in the short run.
3. A deterrent for the credit rating remains the absence inside the group of companies of currency risk
management system. The occurrence of currency risk in H2 2008 has resulted not only in losses due to exchange rate difference, but also to sales reduction because of decrease in consumption of becoming ever expensive imported goods. By Agency estimations, before the end of 2011 the practical occurrence of such risk does not endanger the Issuer, however in the future this risk can occur and trouble the servicing of external creditors’ loans.
4. In the long run, to reduce the risks, the Group of Companies should more in-depth diversify its business, for the sake of substantial reduction of negative effect of price dynamics of the goods interchangeable in relation to citruses and bananas.
The credit rating to planned bond issues of PrJSC UFC can be revised towards rising after completion of
placement and analysis by the Agency of the investment program of the Issuer.

Rating report of Private joint stock company UFC (full version)

Press-release (rus) in details