Moscow puts Alrosa stake into play

Alrosa diamond mine 2The Russian government yesterday officially went ahead with its plans to sell a 10.9% stake in the Alrosa diamond mining company in attempts to help to shore up an economy reeling from the effects of weak oil prices. The world’s largest producer of rough diamonds when measured by carats, Alrosa’s market capitalisation has risen 23% since the beginning of the year, boosting the value of the stake that is being put up for sale to around $860m. Its share price dropped by 1.3% yesterday to close at RUB68.72 ($1.07). In 2013, the Russian government raised $1.3bn through the sale of a 16% stake in the company.
The share placement is expected to close tomorrow and trading in the sold shares to begin on July 11. Potential buyers include the Russian Direct Investment Fund (RDIF), Russian pension funds and existing shareholders, including OppenheimerFunds, Lazard and the AMG’s Genesis Asset Management who were reported to have expressed an interest earlier in the week. The Sakha Republic in Russia’s Far East where Alrosa’s main producing assets are based is to retain its 33% stake.
Hit by a slowdown in the Chinese economy, diamond sales stagnated in 2015, but producers are now seeing scope for recovery. 

Source: reuters