OREANDA-NEWS. RusRating has assigned a credit rating to OOO Expo Plaza (Ufa). The rating is “BBB” on the national scale and “BB” on the international scale, in both cases with a stable outlook.

The rating is based on a high anticipated operating margin and internal rate of return on a real estate development project, as well as strong business ties to B&N Bank and its owners.

Constraining factors include uncertainty risks associated with a business project currently nearing completion of the construction stage, together with a high debt burden and narrow market positions.

OOO Expo Plaza is a limited liability private-sector Russian real estate development company registered on 3 June 2013 Expo Plaza forms part of the GK Bashinvest group, which includes a company that regularly organises national and regional exhibitions in Ufa; other assets include the city's central park, complete with modern attractions and eating facilities. . It is currently working on construction of the 46 300 square metre VDNKh Expo retail and expo complex in Ufa (Bashkortostan).

At this time the Company's debt burden is very high and its operating margin low. Financing is ultimately drawn from B&N Bank, which channels loans via affiliated companies. Once construction is complete operating cash flow is expected to rise, significantly lowering the debt burden and boosting operating profits. The Company's principal asset is the VDNKh Expo facility, which is still under construction. External funding mostly takes the form of accounts payable to the general contractor, the affiliated TSK Global, supplemented by borrowing from other Bashinvest group companies. Leverage is high. Liquidity is sufficient.