OREANDA-NEWS. RusRating has assigned a credit rating to ZAO Solomenski Lesozavod. 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 strong market presence in Karelia and solid backing from the Company's owners.

Constraining factors include an elevated debt burden and a lack of in-house forestry assets sufficient to maintain full production.

ZAO Solomenski Lesozavod is a major forestry company that operates in the Republic of Karelia. In its current form it dates from the acquisition of ZAO Shuyales, OOO Solomenski Lesozavod and OOO Porosozero, together with which it now forms a group. Its primary output is moulded stock made from both whole and pressed wood. Processing and sorting quality meets global standards. The Company's products are sold both domestically and internationally. It is a subsidiary of ZAO Delta-Holding and its beneficiary owner is a private individual with interests in oil, construction, forestry and the retail sale of cars.

The Company's debt burden is elevated. Its operating cash flow is stable but the operating margin is comparatively modest. Prospects for re-financing obligations are judged very strong. Outstanding debt has a balanced term structure and involves no interest rate risks. Fixed assets and intangibles (goodwill) account for the bulk of the balance sheet. Overall risk sensitivity is moderate. Currency risk is high but under current economic conditions the likelihood of its being realised is expected to remain very low into the medium term. Liquidity is sufficient.