OREANDA-NEWS. RusRating has changed the outlook on OOO R1’s credit rating to negative. This reflects changes in the Company’s business plan and new financing arrangements based on anticipated sales of real estate. The project faces increased risks now that financing is dependent on sales.

The rating itself is unchanged at "BBB" on the international scale and "BB" on the national scale.

The rating is based on a high internal rate of return on the Company’s real estate development project and the support of its owners, who have substantial experience in this line of business.

Constraining factors include a very high debt burden and unfavourable current conditions in the retail property market.

OOO R1 is a smaller limited liability Russian real estate development company whose current project involves construction of a retail and entertainment complex in the city of Kemerovo. The Company is owned by Dmitri Yurievich Yashin and Dmitri Alexandrovich Zotov, both of whom have substantial experience as developers. The project is now being promoted by the Base Property Group, which is active in real estate development in several Russian regions.

Operating revenues at this time are essentially zero. Most assets take the form of investments in the facility under construction, while the principal liabilities are accounts payable linked to the transfer of claims previously held by Solidarnost Bank plus a loan from the Company’s owners. Own funds are negative. The debt burden is very high. Liquidity is sufficient. Overall risk sensitivity is elevated.