JCR Eurasia Rating evaluated “Bavet İlaç Sanayi ve Ticaret Anonim Şirketi” and assigned ratings of ‘BBB-(Trk)/Stable’ on the Long Term National Scale along with ratings of ‘BBB-/Stable’ on the International Foreign Currency Scale.

JCR Eurasia Rating evaluated “Bavet İlaç Sanayi ve Ticaret Anonim Şirketi” in an investment-level category on a national level and international level

and assigned ratings of ‘BBB- (Trk)’ on the Long Term National Scale along with a ‘Stable’ outlook. On the other hand, the Long Term International

 

 

Foreign and Local Currency Ratings have been assigned as ‘BBB-’ along with a ‘Stable’ outlook. Other notes and details of the ratings are given in the

table below:

Long Term International Foreign Currency : BBB- / (Stable Outlook)

Long Term International Local Currency : BBB- / (Stable Outlook)

Long Term National Local Rating : BBB- (Trk) / (Stable Outlook)

Short Term International Foreign Currency : A-3 / (Stable Outlook)

Short Term International Local Currency : A-3 / (Stable Outlook)

Short Term National Local Rating : A-3 (Trk) / (Stable Outlook)

Sponsor Support : 2

Stand Alone : BC

 

 

Bavet İlaç Sanayi ve Ticaret Anonim Şirketi was established in 2000 by Mr. Zekeriya NERGİZ with the aim of supplying high quality products and

services for the animal health and environmental safety sectors. Bavet İlaç, carries out the sales and distribution of Good Manufacturing Practices &

Good Laboratory Practice (GMP & GLP) licensed products belonging to international companies and itself since the time of foundation, updated its

portfolio with GMP & GLP certificates which are sectoral requirements and Arion İlaç, Turkey’s first GMP licensed company, produce GMP licensed

products. Bavet İlaç and IPM İlaç Ürünleri which operate in the fields of environmental safety and animal health within the Bavet Group carry out

exports to 5 countries in 4 continents including Eastern Europe, Western Asia, Middle East, North America and South America and is in the process of

obtaining 14 licenses.

The investment process which began by the acquisition of 50% shares belonging to Bavet Group by NBK Capital Equity Partners lasted until 2015. The

partnership led to investments that aim to increase market share, completion of the production facilities belonging to Arion İlaç and Yem Katkı, and

the supply of products belonging to IPM İlaç along with that of Bavet İlaç to domestic and external markets. Currently, Bavet holds 55 veterinary

medical products along with 28 veterinary medical products belonging to IPM İlaç and over 60 commercial products offered by the two companies in

the field of animal feeds and 20 products in response to customers in demand. In the field of environmental health, Bavet İlaç holds 23 licensed

products with the 2 licensed products belonging to IPM İlaç. The anticipated approximation in the levels of profitability to projected figures in 2016

due to the internal equity generation capacity that came under pressure due to the investment process in the past and investments throughout 2015

aiming to raise operational productivity, the improvement in capital needs due to extension of the maturity structure by the planned bond issue, the

distribution of sales revenue, the capability of rising market and competitive effectiveness to support future growth targets, sustainable income

streams and current balance sheet composition have been the principle factors in the assignment of investment level credit ratings by JCR-ER.

The increase in levels of leverage due to rapid growth rates, the exposure to FX risk due to foreign currency denominated leverage structure and the

pressure exerted on the EBITDA margin by financing expenses, the deterioration of cash flows due to the long collection periods inherent across the

sector along with the domination of the sector by global players continue to represent the conventional risk factors.

The ‘Sponsor Support’ grade of Bavet İlaç Sanayi ve Ticaret Anonim Şirketi has been assigned as (2) on JCR Eurasia Rating’s notation scale, taking

into account the financial strength and willingness of the qualified and other shareholders to support the Company, its scale and the contribution

that will be provided by planned investments and sectoral expansion. On the other hand, the ‘Stand Alone’ has been assigned as (BC) on JCR Eurasia

Rating’s notation scale taking into consideration the Company’s ability to manage the incurred risks regardless of shareholder support, internal

equity generation capacity and current capitalization level.

For more information regarding the rating results, you may visit our internet site http://www.jcrer.com.tr or contact our

chief analyst Mr. Orkun İNAN.

JCR EURASIA RATING

Administrative Board