Shen Concern Becomes First Armenian Nonfinancial-Credit Company To I


Noyan Tapan
Feb 27 2007

YEREVAN, FEBRUARY 27, NOYAN TAPAN. Shen Concern CJSC is the first
company to issue corporate bonds after receiving a rating of the
Central Bank of Armenia (CBA). The company chairman Samvel Beglarian
noted at the February 27 press conference that since December 26, 2006
the company has issued 16,000 nominal bonds of a total of 160 mln drams
(about 445 thousand USD) with the maturity of 365 days at concessional
interest rates. According to him, the placement of bonds will be done
in more than one tranche. The first tranche of 40 mln drams has already
been placed: according to CBA Chairman Tigran Sargsian, bonds of this
amount were acquired by ArmSwissbank and put in pledge in connection
with signing repo deals with the CBA. S. Beglarian said that the
issue was a test one: Shen Concern envisages to issue greater amounts
of its own bonds starting from 2008. He considered bond placement
as an opportunity to arract "long money". It was mentioned that at
present Armenian banks cannot provide credits of over 3 mln dollars,
whereas Shen Concern is discussing the opportunity of implementing
an investment program of 9.5 mln euros with the RA Ministry of Trade
and Economic Development. S. Beglarian noted that there are plans
to reorganize Shen Concern into an open joint stock company. Shen
Concern is one of the leading companies of Armenia’s chemical and
building material sectors. Its authorized capital makes 1.5 bln
drams. 36.6% of Shen Concern’s securities belong to the European
Bank for Reconstruction and Devlopment. The company’s net profit
amounted to 272 mln 321 thousand drams in January-September 2006,
growing by 653.5% on the same period of the previous year, while its
production sales grew by 17.6%. The company’s experts explain such a
large growth of net profit by a considerable decline in the cost price
of production and the fact that Shen Concern has profit tax privileges.

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