Press Releases / 06.11.2015
Press Release as of 06.11.2015
AK&M Rating Agency has lowered the national scale credit rating of Baltic Coast (CJSC) to 'C+', with a negative outlook.
The rating downgrade reflects a substantial deterioration of the financial condition of PJSC Russian Salmon operating as part of the BALTIC COAST group of companies. In ruble terms, the debt burden on Russian Salmon actually soared twice, which, combined with deferred losses (resulting from a decline in the salmon stock) has made it nearly impossible for the company to timely meet its loan obligations – most of which are secured by the sureties and guarantees provided by Baltic Coast (CJSC) for a total amount of approximately RUB 2.4 billion, exceeding 50% of the rated Company's debt liabilities, which exerts substantial pressure on the credit rating.
The group could not find a better solution than filing petitions for bankruptcy and the commencement of monitoring procedures at PJSC Russian Salmon and Baltic Coast (CJSC). In doing so, they actually admitted the availability of circumstances obviously indicating their inability to meet their pecuniary obligations, despite the positive profitability of Baltic Coast (CJSC) both in 2014 and in the first half of 2015.
Besides, the Company's asset portfolio weakened resulting from the fraudulent actions of its employees and the former management team. According to the consolidated financial statement as of July 1, 2015, receivables from ex-CEO S.V. Lebedinsky and ex-chief accountant M.V. Ryzhkova in the amount of RUB 300 million qualify as contingent assets of Baltic Coast (CJSC).
From the moment the monitoring procedure was imposed on Baltic Coast (CJSC) until the completion of negotiations with creditors on the restructuring of the group's debt liabilities, AK&M Rating Agency will maintain a negative outlook on the rating monitoring it on a daily basis.
Baltic Coast (operating as part of the BALTIC COAST Group) was established on October 27, 2000 as a company specializing in the production and sales of fish and various kinds of fish products. The Company's core business activities currently include the breeding, processing and marketing of fish and fish products.
This press release is based on the monitoring results of the current credit rating assigned to Baltic Coast (CJSC) and the Credit Rating Methodology for Corporates (Issuers) and Financial Assets as of August 10, 2015.
The rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's creditworthiness and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.
AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.
AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.
AK&M Rating Agency
Ul. Gubkina 3, Moscow, Russia
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.