OREANDA-NEWS. RusRating has assigned a credit rating to ZAO Mospromstroi (Moscow). The rating is “AA-” on the national scale and “BBB-” on the international scale, in both cases with a stable outlook.

The rating is based on a strong presence in construction and real estate development in Moscow; a solid business model; financial results that have been consistently positive over many years; effective corporate governance; the high market value of the Company's real estate assets; and strong support from its owners.

Constraining factors include an elevated debt burden and relatively modest operating margin.

ZAO Mospromstroi is a major construction company that operates mainly in Moscow and the surrounding region. It was created out of the former Glavmospromstroi [trs. Main Moscow Industrial Construction], which was set up as a state enterprise in 1972. Completed projects include the Cathedral of Christ the Saviour, the Poklonnaya Hill monument and the Zelenograd complex. As well as construction the Company is involved in the manufacture of construction materials, real estate development, the management and operation of real estate assets, and the hotel business. It has more than three dozen subsidiaries and dependent firms and is a major owner of real estate in Moscow. In particular via its subsidiaries Mospromstroi controls hotels managed by the international chains Holiday Inn, Marriott and Hilton.

As of 15 April 2014 most of the Company's shares were nominally held by Bank of Moscow. Their ultimate beneficiary owners have not been identified, but according to public sources the primary investors are Mikhail Gutseriev and his nephew Mikail Shishkhanov.

The Company's debt burden is elevated. Operating cash flow is stable but the operating margin is relatively modest, although offset by profits at subsidiary companies and on loans. Mospromstroi is strongly placed to re-finance obligations. Most debt has maturities of less than a year; currency and interest rate risk are low. Accounts receivable make up the bulk of the balance sheet, together with fixed assets and financial investments. Risk sensitivity is moderate. Liquidity is sufficient.