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MIRA INFORM REPORT
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Report No. : |
489296 |
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Report Date : |
08.02.2018 |
IDENTIFICATION DETAILS
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Name : |
UCOM LLC |
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Registered Office : |
Teryan Street 19,
Apartment 4, Yerevan 0010 |
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Country : |
Armenia |
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Financials (as on) : |
31.12.2016 |
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Date of Incorporation : |
19.04.1996 |
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Com. Reg. No.: |
264.110.02498 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
The company is involved in the following activities: ·
Operators of GSM cellular
communications network. ·
Internet service
providers. ·
Broadcasters of TV channels. |
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No. of Employees : |
1,500 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Maximum Credit Limit : |
DRAM
700,000,000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous Rating (30.06.2017) |
Current Rating (30.09.2017) |
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Armenia |
B2 |
B2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
ARMENIA - ECONOMIC OVERVIEW
Under the old Soviet central planning system, Armenia developed a modern
industrial sector, supplying machine tools, textiles, and other manufactured
goods to sister republics, in exchange for raw materials and energy. Armenia
has since switched to small-scale agriculture and away from the large agro
industrial complexes of the Soviet era. Armenia has only two open trade borders
- Iran and Georgia - because its borders with Azerbaijan and Turkey have been
closed since 1991 and 1993, respectively, as a result of Armenia's ongoing
conflict with Azerbaijan over the separatist Nagorno-Karabakh region.
Armenia joined the World Trade Organization in January 2003. The
government has made some improvements in tax and customs administration in
recent years, but anti-corruption measures have been largely ineffective.
Armenia will need to pursue additional economic reforms and strengthen the rule
of law in order to raise its economic growth and improve economic
competitiveness and employment opportunities, especially given its economic
isolation from Turkey and Azerbaijan.
Armenia's geographic isolation, a narrow export base, and pervasive
monopolies in important business sectors have made it particularly vulnerable
to deteriorations in the global commodity markets and the economic challenges
in Russia. Armenia is particularly dependent on Russian commercial and
governmental support, as most key Armenian infrastructure is Russian-owned
and/or managed, especially in the energy sector. Remittances from expatriates
working in Russia are equivalent to about 7-8% of GDP. Armenia joined the Russia-led
Eurasian Economic Union in January 2015, but has expressed interest in
expanding its economic ties with the European Union as well, and in March 2017
an EU-Armenia Comprehensive and Enhanced Partnership Agreement was initiated.
Armenia’s rising government debt is leading Yerevan to tighten its fiscal
policies – the debt almost reached the debt to GDP threshold set by national
legislation as of March 2017.
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Source
: CIA |
COMPANY
REPORT
CO. NAME: UCOM LLC
ADDRESS
Building : BC “Yerevan Plaza”
Street : Grigor
Lusavorchi Street 9
Area :
Kentron District
Town : Yerevan 0015
Country : Armenia
Telephone : (374 11) 444 444 / 400 400 ext. 1062 (Chief
Financial Officer) / 400 000 (Managing Director) / Mobile (374 95) 555 444
(Gurken Muradjan)
Fax : (374 11) 444 441
E-Mail : karen.mnatsakanyan@ucom.am
/ araiktsaturyan@kpmg.co.am
Website :
www.ucom.am
Extended Name : Ucom Limited Liability Company
Also known as : Ucom Telecommunication Company / Yowqom OOO
SENIOR COMPANY PERSONNEL
Name Position
1. Khayk Yesayan Managing
Director
2. Karen Mnatsakanyan Chief
Financial Officer
3. Gurken Muradjan Deputy
Chief Financial Officer
4. Nino Merzoyan Assistant
Managing Director
5. Araik Tsaturyan Senior
Auditor at KPMG Armenia CJSC
Total Employees : 1,500
PAYMENTS
No complaints have been heard
regarding payments from local suppliers or banks.
In 2016 subject incurred
loss of DRAM (4,586,613,000) due to high operating expenses.
We consider it is
acceptable to deal with subject for LARGE amounts,
although it is normal
accepted practice for international suppliers to deal on secured terms with
Armenian importers.
Opinion on maximum credit :
DRAM 700,000,000 (no reason is heard to
doubt the company,
however in view of the
past loss situation
we recommend
international
suppliers exercise a degree
of caution)
Trade risk assessment:
Normal
SIGNIFICANT
CHANGES
UCOM COMPLETES MERGER OF
ORANGE ARMENIA
4 January 2016 (www. telegeography.com) : Armenian broadband access
provider UCOM has completed the merger and reorganisation of its recently
acquired Orange Armenia unit, which will allow it to improve the quality and
range of services provided by the enlarged company. The news of the merger –
carried out in accordance with all applicable legislation, including the local
Transfer Act – was confirmed via Orange Armenia’s website.
As previously reported by
CommsUpdate, in August 2015 Orange Group of France signed an agreement with
UCOM to sell 100% of its mobile subsidiary Orange Armenia. No financial details
of the deal were disclosed, although Orange is known to have spent upwards of
USD350 million in the venture – including its mobile licence. Orange Armenia
launched on 5 November 2009 and today provides a range of 3G/3.5G voice and
data services over a network which covers more than 97% of the Armenian
population. The French giant said at the time that whilst Orange Armenia had
performed well in terms of subscriber growth and profitability, it lacked ‘the
necessary scale to carry out by itself the massive investments required to
enable it to offer its customers convergent services’. The sale to UCOM, which
was established in 2009 and has built up a fibre-to-the-home (FTTH) network
with more than 75,000 residential customers, has effectively created a new
converged player which is able to offer a range of fixed and mobile services.
PRINCIPAL
BANKER
NAME : HSBC
BANK ARMENIA CJSC
Branch :
Teryan Street 66
Town :
Yerevan 0009
Telephone: (374 10) 515 000
Fax : (374
10) 515 001
AUDITOR
KPMG Armenia CJSC
Erebuni Plaza Business
Center, 8th Floor
Vazgen Sargsyan Street 26/1
Yerevan 0010
Telephone: (374 10) 566 762
Fax : (374 10) 566 762
FINANCIAL
INFORMATION
Consolidated
balance sheets as at 31 December 2016 showed (latest available):
31/12/2016 31/12/2015
(in thousands of DRAM)
Assets
Non-Current Assets
Property and equipment 43,579,294 29,561,618 Intangible assets and
goodwill 42,989,650
36,819,633
Prepaid income tax 404,418 729,112
Prepayments and other
assets 765,330 489,370
VAT receivable 2,435,095 -
Deferred tax assets - 653,518
Total Non-Current
Assets
90,173,787 68,253,251
Current Assets
Inventories
948,036 928,255
Trade and other
receivables
7,183,104 4,803,893
VAT receivables 2,931,272 5,512,856
Prepayments and other
assets 1,018,204 1,321,761
Cash and cash
equivalents
4,438,934 1,285,954
Total Current Assets 16,519,550 13,852,719
Total Assets
106,693,337 82,105,970
Equity and Liabilities
Charter capital 16,959 16,959
Accumulated losses (9,029,475)
(4,442,862)
Additional paid-in
capital 17,226,885 7,143,157
Total Equity 8,214,369 2,717,254
Non-Current Liabilities
Loans and borrowings 58,016,768 53,919,920
Deferred tax
liabilities
- 653,518
Provisions 1,715,147 1,137,959
VAT payable
2,435,095 -
Trade and other
payables
14,770,235 7,726,387
Total Non-Current
Liabilities
76,937,245 63,437,784
Current Liabilities
Loans and borrowings 3,444,918 5,227,850
Trade and other
payables
15,843,519 8,982,632
Deferred revenue and
prepayments received 2,253,286 1,740,450
Total Current
Liabilities 21,541,723 15,950,932
Total liabilities 98,478,968 79,388,716
Total Equity and
Liabilities
106,693,337 82,105,970
Income
Statement
Revenue
34,999,236 20,385,787
Other income
1,461,981 921,326
Depreciation and amortization expense (11,486,541) (5,194,725)
Personnel expense (5,552,673)
(3,672,910)
Other expenses (19,644,134)(12,284,192)
Results from operating activities (222,131) 155,286
Finance income 291,797 154,271
Finance costs (7,113,969)
(3,610,633)
Net finance costs (6,822,172)
(3,456,362)
Profit(loss) before income tax (7,044,303) (3,301,076)
Income tax benefit 2,457,690 766,232
Profit (loss) and total comprehensive (4,586,613) (2,534,844)
income(loss) for the year
Historical Consolidated
Profit And Loss Account
Revenue : DRAM 5,128,344,000
- 2012 - exact
: DRAM
8,836,297,000 -
2013 - exact
:
DRAM 11,946,852,000 – 2014 – exact
: DRAM
20,385,787,000 – 2015 – exact
: DRAM
34,999,236,000 – 2016 – exact
Net Profit :
DRAM (177,981,000) - 2012 - exact
(Loss) :
DRAM 884,174,000 - 2013 – exact
: DRAM (1,881,540,000) – 2014 – exact
: DRAM (2,534,844,000) – 2015 – exact
: DRAM (4,586,613,000) – 2016 – exact *
* In 2016 subject incurred
loss of DRAM (4,586,613,000) due to high operating expenses.
Financial year ends 31
December.
LEGAL
STATUS AND HISTORY
Date Started : 19 April
1996
History : Subject was
established in Yerevan on 19 April 1996 and reregistered to the present style
in 2008.
C.R. No. : 264.110.02498
Tax No.: 00024873
Authorised Capital : DRAM
16,959,000 (increased from DRAM 15,050,000)
Paid-Up Capital : DRAM
16,959,000 (increased from DRAM 15,050,000)
Limited Liability Company
with the following shareholders:
1. Edvard Mnacakanyan
2. Gurgen Khachatryan
3. Aram Khachatryan
4. Other undisclosed shareholders
* The exact shareholding structure was not disclosed.
Affiliated companies of the
subject company:
Former Subsidiaries
1. Orange Armenia CJSC
“Yerevan Plaza” Business Center
Grigor Lusavorich Street 9
Yerevan 0015
Telephone: (374 10) 513 551
Fax : (374 10) 560 619
(was merged with the subject
company)
2. AATBC CJSC
(was merged with the subject
company)
ACTIVITIES
The company is involved in the following activities:
Operators of GSM cellular
communications network.
Internet service providers.
Broadcasters of TV channels.
Subject’s
services include:
- Home users:
- Triple Play
- U!Net;
Equipment and Install
Hosting
Secure internet
- U!TV;
Guide TO U!TV
Equipment and Install
- U!Phone;
Equipment and Install
Find your number
Connect to the world
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Corporate users:
- U!Net;
Equipment and Install
Hosting
Secure internet
- U!TV;
Guide TO U!TV
Equipment and Install
- U!Phone;
Equipment and Install
Find your number
Connect to the world
Subject’s
suppliers include:
- Ericsson;
-
Motorola;
- Toshiba;
- Cisco.
NACE Code : 6120 / 6190 /
6399 / 6020
Imports from Europe.
Subject does not export,
all sales are domestic.
FACILITIES
The Company has the
following facilities :
Rented administrative
offices located at the heading address as well as 35 branch offices and service
centres located throughout Armenia (see 'Branch Offices' below).
Subject formerly was
operating from :
Sayat Nova Avenue 40/1
Yerevan 0025
Mobile (374 95) 555 004
(Arman Poghosyan)
REGISTERED
OFFICE
Teryan Street 19, Apartment
4
Yerevan 0010
BRANCH
OFFICES
1. Service Centre “Northern
Avenue”
Northern Avenue 5
Yerevan 0001
Telephone: (374
11) 444 444
Fax
: (374 60) 444 441
2. Service Centre “Arabkir
1”
Komitas Avenue 30
Yerevan 0012
3. Service Centre “Arabkir
2”
Komitas Avenue 60/2
Yerevan 0014
4. Service Centre
“Davatshen”
Tigran Petrosyan Street 25/5
Davtashen 3rd block
Yerevan 0054
5. Service Centre
“Kanaker-Zeytun”
Paruyr Sevak Street 90
Yerevan 0069
6. Service Centre “Nor
Nork”
Gai Avenue 17/3
Yerevan 0062
7. Service Centre “Avan”
Marshal Khudyakov Street 177/3
Yerevan 0063
8. Service Centre
“Shegavit”
Bagratunyats Street 18
Yerevan 0046
9. Service Centre
“Malatia-Sebastia”
Raffi Street 39/4
Yerevan 0064
10.Service Centre “Abovyan
City”
Hatis Street 1/30/12
Abovyan
11.Service Centre
“Ajapnyak”
Margaryan Street 10/9
Yerevan 0078
12.Service Centre “Vanadzor
City”
Tigran
Mets Street 61
Vanadzor 2021
13.Service Centre
“Arshakunyats”
Arshakunyats Street 34
Yerevan Mall
Yerevan 0026
14.Service Centre
“Erebouni”
Erebouni Street 20/52
Yerevan 0020
15.Service Centre “Armavir
City”
Hanrapetutyan Street 7
Armavir
16.Service Centre “Amiryan”
Amiryan Street 4/7
Yerevan 0010
17.Service Centre “Kapan
City”
20/44
Kapan
18.Service Center
Saryan Street 12
Yerevan 0002
19.Hyusisain Avenue 5
Yerevan 0001
20.“Sayat Nova” Service
Center
Sayat Nova Avenue 40/1
Yerevan 0025
SPECIAL
NOTES
The telephone number which
you provided : 374-95988147 was not verified. Please note that subject’s
correct telephone and mobile numbers are as per heading.
The address which you
provided: TERYAN 19/4, 0009 YEREVAN applies to subject's registered office
address. Please note that subject's operational office address is as per
heading.
Interviewed : Karen
Mnatsakanyan (Chief Financial Officer).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 64.14 |
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1 |
INR 89.50 |
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Euro |
1 |
INR 79.43 |
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AMD (Dram) |
1 |
INR 0.13 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
VAR |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.