[Diamond miner Alrosa] Privatising Russian state companies – by Anna Kuchma (Russia and India Report – May 16, 2016)


The Russian government said at the beginning of this year that it had “a large privatization plan”, within the framework of which it intends to get one trillion rubles ($12.6 billion) in two years. The plan for 2016 includes the sale of shares in two oil companies, Rosneft and Bashneft, a share package in one of the largest state banks, BTV, and the Alrosa diamond company.

At the end of April 2016, the privatization format of the list’s first company was determined. The government decided to sell 10.9 percent of Alrosa, Russia’s largest diamond mining company, in the Moscow Stock Exchange, writes the Vedomosti newspaper.

The schedule for the sale is not specified. Earlier, the government considered selling the package to a strategic partner. However, the company itself requested public privatization.

“The sale of the shares on the stock exchange will help us receive a higher evaluation and attract a large circle of interested investors,” explained Maxim Chernyaev, chief economist at Novas Energy Services, an oil service company. According to a Vedomosti source, the government expects to earn more than 50 billion rubles ($754 million) from the sale.

The fate of Rosneft and Bashneft will also be decided soon. As Minister of Economic Development Alexei Ulyukaev said earlier, 19.5 percent of Rosneft’s shares may be sold, in parts. The government expects to get 650 billion rubles ($9.7 billion) from this deal, he said.

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