OREANDA-NEWS. RusRating has lowered the credit rating of OOO Artsistemstroi from "BB" to “B+” on the international scale and from "BBB" to “BB+” on the national scale, in both cases with a negative outlook.

The rating is based on close business ties to the Peresvet group and the associated financial support.

Constraining factors include the cessation of work on the Company’s project in response to realised legal risks; high uncertainty associated with a new real estate development project in its early stages; a high debt burden; a minimal market presence; and uncertain conditions in the residential real estate market.

The rating cut reflects the cessation of work on the Arkhangelskoye residential development project following the expiration of the construction permit, as well as uncertainty over the timing of its renewal.

The negative outlook is based on zero prospects for renewed activity in the near future.

About the Company

OOO Artsistemstroi is the real estate developer behind the elite 98 900 m2 Arkhangelskoye residential project located in the south-west of Arkhangelskoye town (Krasnogorsk district, Moscow region). The Company is owned by Bowron Holdings Ltd. and has close business ties to the Peresvet group and its owners, Oleg Pronin and Vladimir Melnikov.

At this time the Company is unable to service its debt due to the cessation of work on the Arkhangelskoye project. Operating profits are generated by its role as a financial intermediary. Cash flow gaps are possible in the longer term and overall risk sensitivity is high. On the basis of official accounts assets consist mainly of financial investments in debt instruments plus accounts receivable and material reserves.