OREANDA-NEWS. RusRating has assigned a credit rating to ZAO Likhoborski Avtoservis. The rating is "BB" on the international scale and "BBB" on the national scale, in both cases with a negative outlook.

The rating is based on the substantial market value of the Company’s assets, which exceed its own financial debt and interest obligations plus debt and interest on which it has issued guarantees; close business ties between its owners and BFG-Bank and so a high probability of refinancing in the event on unfavourable macro-economic developments; and the competitive sale price of retail space in the MetroMall2 facility.

Constraining factors include a possible fall in demand for commercial real estate in response to weakening macro-economic conditions in Russia; a lack of current operating revenues and the resulting high debt burden; and high exposure to currency risk.

The negative outlook reflects the high (in RusRating’s view) likelihood that the project will be suspended in response to current uncertainty in the Moscow market for commercial real estate, plus a low occupancy rate.

About the Company

ZAO Likhborski Avtoservis was set up in 2002 and is a member of the Imagine Estate development group controlled by Denis Vyacheslavovich Mayakov. It owns the 18 800m2 MetroMall2 retail facility in Moscow (Dmitrovskoye hwy. 62) next to the Verkhniye Likhobory station on the Lyublinsko-Dmitrovskaya metro line, which is scheduled to open in 2016.

The Company’s main assets are the MetroMall2 facility and financial investments (loans to other companies in the Imagine Estate group), plus veksels (promissory notes) issued by BFG-Credit Bank. Obligations consist of dollar loans extended by the same bank. As well as its own R879mn in financial debt the Company has guaranteed R2.55bn in BFG-Bank loans to three affiliated companies –  OOO KMK-Oniks, OOO Noviye Promyshlenniye Sistemy and OOO TD Glavkachestvo – that also invested in the MetroMall2 project. Liquidity is sufficient. Risk sensitivity is very high.

The strategy adopted by the Company’s owners calls for the sale of small blocks of floor space in the MetroMall2 facility up until June 2015 at a price of R262 000 per square metre. This price is competitive and will cover outstanding debt and interest obligations both at the Company itself and on the above-mentioned guarantees.