Sadovaya Group considers sale of Rassvet-1 Mine

Обзоры по компаниям и отраслям 27.05.2013 Sadovaya Group (SGR PW) is seeking a buyer for one of its two mining subsidiaries, the Rassvet-1 Mine, Interfax reported on May 24, citing an announcement made by the Luhansk Oblast Administration. Sadovaya’s management intends to use a part of the proceeds to redeem a USD 0.4 mln debt it owes to the miners of Sadovaya Mine, the statement said. Roman Topolyuk: The news, subject to official confirmation, may have positive implications for the Group, whose miserable USD 0.3 mln revenue in 1Q13 failed to cover not only USD 2.8 mln fixed costs for keeping both of its mines idle, but also USD 0.8 mln in financial costs. The cash inflow would enhance the company’s solvency and liquidity position, but a lack of buyers for the mine and its probable unattractive valuation (given Sadovaya’s distressed situation caused by adverse market conditions) could mitigate positive effect of the sale.