GIJ - GijimaAst Group Limited - Press release - Cr
GIJ
GIJ
GIJ - GijimaAst Group Limited - Press release - Credit Rating
GIJIMA AST GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/021790/06)
Share code: GIJ
ISIN: ZAE000064606
Press release - GijimaAst - Credit Rating
New Rating:
GIJIMA AST GROUP LIMITED:
Long-term zaBBB+
Outlook: Positive
CA-Ratings would like to announce that it has assigned a credit rating to
GIJIMA AST GROUP LIMITED (GijimaAst) after a full interactive investigation
based on the normal rating mandate. The rating (zaBBB+) is on a national
scale for South Africa and is long-term with a positive outlook for a three-
year horizon.
This symbol indicates that CA-Ratings views the long-term credit strength of
GijimaAst to be two notches above what is termed South African Investment
Grade (being zaBBB-) which is a category described as being of Adequate
Strength. The level is at the highest point in this category and is one notch
below the next long-term debt ratings category which is termed Strong.
This rating is unusual in that it assigns a "positive" outlook at this
initial stage. A positive outlook signals that the agency is of the opinion
that an upgrade is possible over a three-year horizon. This type of outlook
is very rarely assigned at the time of a first rating.
Compared to other companies listed on the JSE Limited, GijimaAst is viewed to
occupy a position significantly above the median of zaBB+.
During 2006 GijimaAst undertook a successful securitization of its trade
receivables. The credit-enhanced rating of zaAA assigned to the ring-fenced
special-purpose vehicle (which does not form part of the GijimaAst Group) in
the securitization transaction remains at that level.
The rating assigned to GijimaAst is supported by, inter alia, a strong
competitive position, good product lines, solid management at middle and
senior levels, and organic growth on the back of established, expanding
customers.
- Factors constraining the rating are:
- limited financial flexibility;
- market perceptions that have not yet turned strongly positive ;
- low net margins with pressure on gross margins; and
- risks associated with expansion into government services.
Samrand
21 February 2007
Date: 21/02/2007 10:30:01 Produced by the JSE SENS Department.
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