The IPO will involve the sale of shares owned by both the Russian Federation and the Republic of Sakha (Yakutia), where almost all the company’s production operations are based.
The Russian government will offer up to 515,547,593 shares, representing approximately 7 percent of Alrosa's shares, as will OJSC RIC Plus, which is wholly-owned by the Republic of Sakha.
And Wargan Holdings Limited, a Cyprus-based firm owned by Alrosa, will offer up to 150,237,555 shares, or around 2 percent of the mining firm's shares. The net proceeds of the offering to be received by Alrosa from the shares sold by Wargan Holdings Limited will be used to repay existing debt, Alrosa said.
Alrosa President Fedor Andreev said, “We expect that the offering will help to reinforce our unique position in the global diamond industry. We also expect that the offering will expand our access to the international capital markets and help to unlock the value of the company.
"We will continue to focus on our core business of exploration, mining and sale of rough diamonds, pursuing expansion opportunities in Russia and other regions, such as Africa. We will also continue to improve operational efficiency and to consolidate our position as the global leader in the diamond mining industry. Corporate social responsibility will remain among key priorities, especially in Yakutia where most of our operations and the majority of our 39,000 employees are based,” he added.
Olga Dergunova, Deputy Minister for Economic Development of the Russian Federation and Head of the Federal Agency for State Property Management, commented: “This offering marks an important milestone for both Alrosa and the on-going privatization program in the Russian Federation. Alrosa has an important and unique role in the international diamond market. It is also one of the largest Russian mining companies and a key contributor to the local economy in its areas of operation.
"The company’s partial privatization, including the offering of the shares through the facilities of MICEX SE, is a landmark step in the implementation of the government’s policy of reducing the state’s role in the economy. We believe that high standards of corporate governance and transparency required for publicly traded companies are important for improving the efficiency and profitability of Alrosa's business.”
Egor Borisov, President of Republic of Sakha (Yakutia), said the offering would enable the company to "benefit from its engagement with the international capital markets while the state will retain a controlling stake. Alrosa has historically been the backbone of the Yakutian economy, and it remains one of the largest employers and contributors to the regional budget."
