OREANDA-NEWS. 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 future operating margin and high internal rate of return on a real estate development project, as well as the substantial experience of the Company's owners in this line of business.

Constraining factors include uncertainty risks in connection with a new business project in its early stages, a high debt burden and a limited market presence.

OOO R1 is a limited liability Russian real estate development company that is constructing a 39 570 square metre retail facility in the city of Kemerovo (address: ul. Tukhachevskogo 56). Construction is scheduled for completion in April 2015. The Company is owned by Dmitri Yurievich Yashin and Dmitri Alexandrovich Zotov, both of whom have substantial experience as developers. Both currently have ties to the Base Property Group, which is active in real estate development in several Russian regions.

The Kemerovo retail project is currently in the investment stage and therefore generates no revenues. Most assets take the form of investments in the planned facility, while the principal liabilities are obligations to OOO Mir Tekstilya [trs. Textile World LLC], which has taken over claims under a loan received from Solidarnost Bank. Plans call for a further R1.2bn loan from Absolut Bank to finance the remaining construction, which would significantly increase the Company's debt burden. If the project is finished on time R1 can count on significant cash flows that will reduced its debt burden to an acceptable level. The retail facility is expected to generate a high operating margin. Risk sensitivity is elevated. Liquidity is sufficient.