Russia Sells Stake in Diamond Miner Alrosa for $815 Million (The Moscow Times – July 11, 2016)

The Russian government has sold a stake in Alrosa, the world’s largest diamond miner, for 52.2 billion rubles ($816 million), the RIA Novosti news agency reported Monday.

The sale was the first in a program of partial privatizations designed to help cover a large budget deficit. The government sold 10.9 percent of Alrosa at 65 rubles ($1.01) per share — a 3.7 percent discount to their market price. The government still controls one-third of the company’s shares.

Boris Kvasov, a director at VTB Capital, one of the Russian banks that managed the sale, told the RBC news agency about 35 percent of the shares were bought by the Russian Direct Investment Fund, a state-backed investor. A similar amount was bought by Europeans, with Asian and Middle Eastern buyers purchasing a further 25 percent, he said.

U.S. investors bought only around 5 percent of the shares on offer. Demand may have been depressed by Western sanctions imposed on Russia over the Ukraine crisis.

Considering the sanctions and Russia’s economic slump, “I think it’s a reasonable purchase and price,” said Oleg Vyugin, chairman of Russia’s MDM Bank.

For the rest of this article, click here: