Fitch Rates TMM at 'CC'; 'B' (ukr)
OREANDA-NEWS On 09 December was announced, that Fitch Ratings assigned TMM Real Estate Development plc (TMM) long-term foreign and local currency ratings [Issuer Default (IDRs) is the formal name of the ratings] of 'CC', a National Long-term rating of 'B(ukr)', and has simultaneously placed both ratings on Rating Watch Negative (RWN). Rating's assignment was initiated by TMM considering the further Company's plans to attract investments in real estate objects. At that in November, 2008 TMM has extended the maturities of short-term debt till November, 2009, which wasn't represented in Fitch Ratings. At present TMM is negotiating with two international banks for the external debt facilities attracting in the amount of UAH 130 million and USD 150 million.
Fitch Ratings, global rating agency, has assigned TMM long-term foreign and local currency ratings [Issuer Default (IDRs) is the formal name of the ratings; IDRs are assigned to the majority of issuers] of 'CC', a National Long-term rating of 'B(ukr)', and has simultaneously placed both ratings on Rating Watch Negative (RWN). Rating's assignment was initiated by TMM considering the further Company's plans to attract investments in real estate objects. As Fitch reported, the ratings are supported by TMM's favourable position within the Ukrainian residential property market, the company's vertical integration comprising development, construction and construction materials businesses, and its substantial project portfolio which is well diversified by quantity (35 projects) and types of project. The main part of the project portfolio is represented by residential projects in which the company has its most expertise. Great number of projects under development is considered by Fitch Ratings as a negative rating factor. Company's ability to construct planning objects depends on the debt facilities, which is a challenge in the terms of current financing environment.
Therewith in November, 2008 TMM has extended the maturities of short-term debt till November, 2009, which wasn't represented in Fitch Ratings. At present TMM is negotiating with two international banks for the attracting external debt facilities in the amount of UAH 130 million and USD 150 million.
Currently TMM is not starting new real estate projects, which need the external investments at the beginning. At present TMM focuses on the construction of the current real estate projects – the Company covers its expenses by the operating activity's income.
Larysa Chyvurina, the Financial Director of TMM Company: "For the moment when Fitch ratings agency has requested information two credits have been planning to be repaid on November, 30, 2008. TMM Company has made its short-term debts rescheduling. On November, 28, 2008, TMM Company have signed new credit agreement for UAH36 mln with the payment day on November, 27, 2009, and additional contract to rollover the present credit line for EUR17,2 mln with the payment day on November, 30, 2011. Therefore, as of today TMM's short-term debts volume (including bonds redemption) is not USD65 mln as stated in the Fitch report, but USD35 mln with payment term at October-November, 2009.
As it is indicated in the Fitch report, as of November, 20, 2008, Company's total debt has been USD88 mln. As it is correctly specified in the report, 66% of the debt are credits, guaranteed by the real estate assets. The other 34% of liabilities are the bonds, which do not require assets backing".
Mykola Tolmachov, the General Director of TMM Company: "Fitch rating assignment is TMM's own initiative. We made that considering the further Company's plans to attract investments in real estate objects. ТММ has received an optimal rating which fits the country's rating.
TMM is my lifework. I founded the company in 1994, and during 15 years I've been developing it, and I will develop this business. Currently we are operating stable and continue the construction of our objects. While Ukrainian and world economy slows down we are focusing on searching the new possibilities for development. Currently we are negotiating with 2 international banks on attraction investments in amount of UAH 130 million and USD 150 million. Signing the contract with a bank for UAH 130 million may occur in February, 2009. Negotiations with another bank are currently in the proceess"
At present TMM constructs 11 residential real estate objects with the total area of 410 thousand square meters. Other 3 million square meters are under development. The total area of projects completed by TMM within the last 15 years is over 450 thousand square meters.
In January-September, 2008 the net profit amounted to UAH 190.92 million, showing a 47-fold increase compared to the same period in 2007; net income – UAH 480.79 million, showing a 7-fold increase compared to the same period in 2007. The volume of TMM's residential property sales increased by 48% (in square meters) in January-September 2008, compared to the same period in 2007.
Комментарии