"Expert RA" has extended the status of "under supervision" according to the BSK rating

AK&M 23 July 2021 18:53

On July 23, 2021, the rating agency "Expert RA" extended the status of " under supervision "according to the credit rating of the non-financial company" Bashkir Soda Company", which means a high probability of rating actions in the near future. The company's rating continues to operate at the giA+ level with a stable outlook. This is stated in the agency's message.

Bashkir Soda Company Joint Stock Company is one of the largest chemical complexes in the country. The company ranks first in Russia in the production of baking soda and soda ash, and also ranks third in the production of caustic soda and PVC. Combining three production complexes: Soda and Caustic in Sterlitamak (Bashkiria) and Berezniki Soda Plant (Perm Krai), the company produces just over 2.4 million tons of soda ash and over 260 thousand tons of PVC annually.

On December 11, 2020, the court decided to transfer 95.72% of the company's shares in favor of Rosimushchestvo. In mid-January, an appeal was filed by the current shareholders of Bashkir Chemistry JSC, Bashkir Chemistry Trading House LLC, as well as three minority shareholders. However, the Court of Appeal upheld the decision of the lower instance. As a result, Vladimir Putin gave instructions to transfer 38.3% of the shares to the ownership of the Republic of Bashkortostan, 11.7% plus one share will be transferred to the trust management of structures controlled by the authorities of the region. The change of shareholders will not entail changes in corporate governance, as well as in the operating activities of the company. In this regard, the agency does not see high risks due to a possible change in the composition of the owners.

When assessing the company's business risk profile, the agency also took into account the sufficiency of the resource base. Earlier in 2019, BSK JSC received a license for the raw material development of the Kushtau shikhan, but exploration and production of limestone from this deposit were suspended due to confirmation of the status of a nature protection zone. Now the company is actively working to confirm the reserves of the existing field, which will be able to ensure further operational activities until 2027 due to the expansion of the area, until 2044 – due to deeper production. The official final results of confirming the availability of reserves are expected in early 2022. Additionally, the company considers as alternative sources of raw materials neighboring deposits that have not been previously considered and/or the economic feasibility of which has not been confirmed. The company has received a number of commercial offers from third-party organizations about its readiness to provide limestone of the necessary quality and in an amount that covers more than 80% of the limestone demand.

The extension of the "under supervision" status is associated with the preservation of circumstances that may affect the company's activities in the future. The circumstances that were the basis for the extension of the "under supervision" status are related to the unresolved problem of raw materials supply.