S&P affirms OMZ

Standard & Poor's said it affirmed its CCC+ long-term corporate credit and BB(ru) national-scale ratings on OAO OMZ (Uralmash-Izhora Group).

The ratings were removed from CreditWatch with developing implications, where they had been placed on Feb. 8, following the announced acquisition of a controlling stake in the company by a group of investors represented by Gazprombank (BB/positive/B), the agency noted.

The outlook is developing.

S&P said that the ratings on OMZ are currently constrained by its highly leveraged financial profile, with a large proportion of short-term debt, aged asset base and low operating efficiency.

The challenging competitive environment of the Russian and international capital goods markets is also a constraint, the agency said, adding that these factors are partly offset by OMZ's strong positions in its domestic market, diversity - albeit limited - by end product and market segment and some cost advantage over international competitors.

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