12 December 2011
Sadovaya Group (SGR PW) reported on Friday that its subsidiaries signed a USD 25 mln loan agreement with local OTP Bank. The 5-year loan at 1M Libor+8.5% will be used to repay outstanding debt (USD 18 mln at end-3Q11) and develop the newly acquired Raskoshniy mining field. Alexander Paraschiy: This is the second news of Sadovaya attracting debt over the last month, after the USD 36 mln EBRD facility. With the new loan, Sadovaya can significantly decrease its cost of debt, which was 12.2% in 3Q11. We believe the market will reward the company’s decreased cost of debt and more clarity on sources for financing its investment programs.