OREANDA-NEWS. September 03, 2015. RusRating has assigned a credit rating to Global Electrics (Moscow). 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 the market value of the Company’s assets, which is sufficient to cover the principal due on its own loan plus obligations under loan guarantees, as well as on close business ties between its owners and BFG-Credit Bank, which imply a high probability that current loans will be re-financed in the event of unfavourable macro-economic developments.

Constraining factors include potential fall in demand for commercial real estate due to weakening macro-economic conditions in Russia; the Company’s very high current debt burden; insufficient current cash flow to meet interest obligations; and high currency risk.

About the Company

Global Electrics is a limited liability company set up in 2011 that forms part of the High Street real estate development group. The Company owns the 27 300 m2 Mandarin Retail Centre in Moscow (ul. Montazhnaya 9) near the Moscow Ring Road and adjacent to the Schelkovskoye and Otkrytoye highways. The facility is currently being renovated and floor space is being sold off in small lots.

Assets consist mainly of accounts receivable and commercial real estate (the Mandarin centre). Most obligations take the form of dollar-denominated loans extended by BFG-Credit Bank. Global Electrics has guaranteed R3.16bn in loans from the same bank to three other companies. Its debt burden is very high. Liquidity is sufficient. Risk sensitivity is high, reflecting current conditions in the real estate market.

Strategy calls for the sale of floor space in the Mandarin centre in small lots up until July 2016. The sale price (R190 000 per m2) is competitive and sufficient to cover debt obligations, including guarantees.