25.08.2014

National Rating Agency increases OJSC GAZ credit rating up to «A+»

National rating agency (NRA) increase the individual credit rating of OJSC GAZ, major legal entity of GAZ Group, consolidating the holding IFRS financial results, up to «á+» level according to the national scale.

"Increase of the current level of company rating shows the achievement of agency's forecasts regarding the preservation of the positive dynamics of GAZ Group development based on the results of the previous year, including improvement of financial stability indicators and preservation of the acceptable level of debt load. The following factors also have a positive influence on the rating level: preserved position as a key player in its market segments, active participation in the federal projects, export development, continuous work aimed at improvement of production capacities, implementation of new technologies, renovation of the model range and enhancement of products' competitiveness on the market. All these factors will allow GAZ Group to maintain the leading market positions and ensure future development", comments NRA.

In 2013 GAZ Group continued large-scale investing into perspective project on model range renovation and technology modernization, investment volume in this sphere amounted to RUR 8,8 B. In 2013 the company started serial production of the new generation GAZelle NEXT vehicles, arranged production of Voyage, Cruise and LIAZ buses for Sochi Olympics, launched the production of new medium Vector buses. Besides in 2013 GAZ Group also continued to develop the product line of highly efficient gas-fuelled vehicles, started serial production of methane-fuelled GAZelle BUSINESS vehicles and PAZ buses, developed a new gas-fuelled KAVZ bus and started the R&D for creation of CNG/LPG engines based of the new family of YaMZ-530 engines.

In 2013 GAZ Plant launched the production of foreign vehicles within contract manufacturing cooperation with Volkswagen, General Motors and Daimler. Moreover, the company launched several projects on component localization: YaMZ started the production of Mercedes OM-646 engines; GAZ Plant started the production of frames for Mitsubishi Pajero Sport; the company signed the MoU with the Italian manufacturer MW Group on organization of modern production of wheel disks at GAZ; the company continued working on together with Bulten JV creation for fasteners production.

As a risk factor at the moment the agency indicates the necessity of funding of a big volume of capital expenses, which can lead to increase of the debt load, and also the exposure of GAZ Group business to the influence of adverse macroeconomic and geopolitical factors which are intensified this year, including the significant increase of credit interest rates which can bring significant pressure on efficiency and financial stability indicators of the company in the nearest future.

For reference

National Rating Agency (NRA) has been operating since 2002 and is one of the leading independent rating agencies in Russia. At the moment NRA has over 350 legal entities as its clients with regard to established contact ratings. Over 1000 companies and banks participate in other informational projects of NRA. The NRA is certified by the RF Ministry of Finance. NRA ratings are officially accepted by the Central Bank of Russia, Federal Financial Markets Service, Moscow Stock Exchange, RF Ministry of Economic Development, VEB, ROSNANO, Agency for mortgaging and housing crediting, National Association of Stock Market Traders (NAUFOR), National Securities Market Association, National League of Management Companies, Association of Russian Banks. Since 2011 NRA is the member of the European Association of Credit Rating Agencies (åáóRA). Since 2008 NRA follows the Code of professional ethics of Russian rating agencies, approved by the SRO National Securities Market Association.

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