February 2, 2011
Russian diamond miner Alrosa could raise up to $2 billion in an initial public offering of a 20 percent stake by the end of the year as part of a large scale government plan to sell off state assets, its CEO said.
“We are doing the preparatory work,” Chief Executive Fyodor Andreyev told reporters on the sidelines of the Troika Dialog Economic Forum in Moscow on Wednesday.
“The indicative valuations from banks, based on the EBITDA, are $8-10 billion (for the whole company). A 20 percent stake could therefore raise $1.5-2 billion.”
State-controlled Alrosa, which competes with De Beers for the position of world’s biggest diamond miner, will decide in coming months whether to proceed with the IPO, but it could be held by the end of 2011, Andreyev said.
The board will meet on Feb. 22 to call a shareholders meeting – likely for April – to decide on the IPO. Alrosa is expected to produce 34.44 million carats of diamonds from its Yakutia heartland in Russia’s Far East in 2011, generating revenue of $3.53 billion.
Russian companies have been enthusiastic IPO candidates in 2011 to date, with four firms in the process of trying to raise a combined $3.3 billion in London – more than half the $5.5 billion raised in the whole of 2010.
Alrosa is also looking at London, as well as at Russian bourses, Andreyev said.
The Russian government’s initial 1 trillion rouble ($33.43 billion) privatisation plan is also expected to kick off this year – with part the cash raised via primary and secondary offerings.