Moody's rates Donbass B1

Moody's Investors Service said it assigned Industrial Union of Donbass B1 foreign- and domestic-currency corporate family ratings.

The outlook is stable.

The ratings reflect the company's relatively strong business profile given the good operational diversity with multiple manufacturing sites, balanced and diversified product portfolio, competitive advantage in its unrestricted access to the Western European markets through its subsidiaries Huta Czestochowa in Poland and Dunaferr Dunai Vasmu Rt in Hungary, its advantageous geographic location, profit margins, distribution networks in Ukraine, Poland and Hungary, and credit metrics, the agency said.

The rating remains limited by its relatively small size, its exposure to cyclical steel prices, lack of track record, relatively high debt, ownership concentration among several individuals and potentially large dividend payments, Moody's said.

The outlook reflects the expectation for organic growth and investments in efficiency and value-added product mix to bolster cash flows and strengthen debt protection measurements, Moody's said.

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