Monday, December 6 2010 15:37
"Shen Concern" carries out construction of production facilities due to additional paid-in capital
ArmInfo. A big producer of building materials, "Shen Concern" CJSC, keeps on building and upgrading the production facilities due to the funds received from issue of corporate bonds.
As the Company Financial Director Armen Balasanyan told ArmInfo, within the frames of the 5th public issue of its bonds, the initial placement of which was held in early November, the Company placed bonds to 500 mln drams which have already underwent listing at the exchange and will circulate in Bbond exchange category. The Company attracted another 1.5 bln drams due to additional issue of corporate borrowings organized through private subscription also in November 2010. According to Balasanyan, the Company will direct the funds, gathered from the market, to construction of 4 new workshops for processing of building materials - gypsum, chalk-stone and sand. Moreover, the Company also schedules to upgrade the workshops for production of dry mixtures using the up-to-date technologies recently implemented by the Company. The Company also informed that the bonds of the 5th public issue were placed among 7 individual persons and 4 legal entities. The bond yields makes up 12,5%, their circulation period - 2 years. The Company first entered the market of corporate bonds in 2006 with the emission volume of 40 mln drams. Bonds of the 4th issue in the volume of 500 mln drams are currently in circulation at NASDAQ OMX Armenia, and their circulation period expires in February 2011. "Capital Asset Management" investment company is the underwriter and market-maker of this issue (as well as of the rest 4 issues).
To recall, "She Concern" was founded in 1995 and it is an assignee of ArmResourceImpex state enterprise. At present, the Company is primarily engaged in production and realization of building materials, including paints, varnishes, dry building mixtures, as well as concrete plates.
ArmInfo experts think the yield of this issue, in conditions of utmost inefficiency of the stock market and with account of average rates for alterative investment tools, is not bad. Despite some appreciation of the debt (from 11% on the 4th issue to 12,5% on the 5th issue), the 5th issue is refinancing of liabilities on the 4th issue.
To note, the capital market in Armenia currently experiences serious stagnation, that has been caused by the rate regulation policy conducted by the economic authorities, as well as by the economic crisis which discourage investors from investing in Armenia. Experts think that the absence of cash resources in Armenia is the key problem which hampers dynamic development of the country's capital market, including the sector of corporate bonds.
According to experts, a smoldering state of the market of corporate debt instruments in Armenia has no alternative within the next one or two years, and a possibility of its recovery is connected not only with overcoming the crisis of consequences, post-crisis reformation of the whole economy structure, but also with reformation of the financial infrastructure in general.
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