Sadovaya 17.5% stake pledged against EBRD loan

Sadovaya Group (SGR PW) announced on Feb. 14 that its main shareholder, Connectico Ventures Limited (owner of a 75% interest in the company), pledged 17.5% of the company’s shares against a loan from the European Bank for Reconstruction and Development. The pledge was structured after the EBRD approved a USD 36 mln loan for Sadovaya in November 2011, at an interest rate of 6.5%+3M LIBOR (current effective rate of 7.02%). The market value of 17.5% of Sadovaya shares (USD 25 mln) exceeds the amount of the first tranche that is expected to be drawn from the EBRD in February 2012 – USD 18 mln. Sadovaya plans to use the EBRD financing to develop its waste recovery segment.