ALROSA Announces Pricing of Its Offering at RUB35 Per Ordinary Share
MOSCOW -- October 28, 2013
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For Immediate Release 28 October 2013
ALROSA ANNOUNCES PRICING OF ITS OFFERING AT RUB35 PER ORDINARY SHARE
Open Joint Stock Company “ALROSA” (“ALROSA” or the "Company"), the world’s
largest diamond mining company based on rough diamond production volume, today
announces the pricing of the offering (the “Offering”) of its existing shares.
The Offering is in the form of ordinary shares (the “Shares”) that are
admitted to trading on the “A1” quotation list of CJSC MICEX Stock Exchange
(“MICEX SE”), a subsidiary of the Moscow Exchange, under the ticker symbol
*The offer price has been set at RUB35 per Share.
*The Offering comprises 1,181,332,741 Shares, or RUB41.3 billion, assuming
no exercise of the repurchase option (as described below).
*The offer price implies a market capitalisation for ALROSA of RUB257.7
*The Offering comprises the sale of existing Shares by the following
*515,547,593 Shares, representing approximately 7 per cent of the
Company’s share capital, will be sold by the Russian Federation under
a framework established by decrees of the Russian Government dated 30
March 2013 and 26 October 2013;
*515,547,593 Shares, representing approximately 7 per cent of the
Company’s share capital, will be sold by OJSC RIC Plus, an open
joint-stock company, wholly-owned by the Republic of Sakha (Yakutia);
*150,237,555 Shares, representing approximately 2 per cent of the
Company’s share capital, will be sold by Wargan Holdings Limited, a
company organised under the laws of the Republic of Cyprus and
controlled by ALROSA.
*In connection with the Offering, VTB Capital plc, acting as a stabilising
manager, may procure the purchase, for stabilisation purposes, of the
Shares on MICEX SE or otherwise in a total number of up to 10 per cent of
the number of the offer shares within 30 days from the date of this
announcement. Sunland Holding SA, a wholly-owned subsidiary of ALROSA, has
granted the stabilising manager an option to require Sunland Holding SA to
purchase the Shares held by the stabilising manager as a result of
stabilisation transactions in total number of up to 10 per cent of the
number of the offer shares at the offer price.
*The Company and Wargan Holdings Limited have each agreed in respect of
themselves and its subsidiaries to a lock-up for a period of 180 days,
subject to certain exceptions. In its letter of intent, the Ministry of
Property and Land Relations of Yakutia has agreed in respect of itself and
any authorised agencies or entities to a lock-up for a period of 180 days.
According to the Russian Government decree dated 26 October 2013, a
decision on further sale of Shares (other than the Shares to be sold by
the Russian Federation in connection with the Offering) may be adopted by
the Russian Federation no earlier than 180 days after the date of the
*The branch office of private unlimited company Goldman Sachs (Russia) is
acting as agent (poverenny) in the name and on behalf of the Russian
Federation in connection with the sale of the Shares by the Russian
Federation and is providing services as arranger of the sale of the Shares
by OJSC RIC Plus.
*Goldman Sachs International, J.P. Morgan Securities plc, Morgan Stanley &
Co. International plc and VTB Capital plc are joint global coordinators
and joint bookrunners of the Offering. Renaissance Capital is a joint
bookrunner of the Offering.
Fedor Andreev, President of ALROSA, said:
“We are delighted with the international and domestic investors’ enthusiastic
response to the Offering, which has marked an important strategic step for
ALROSA. Our unique position as a global leader in rough diamond production
with the world’s largest reserve base, favourable industry fundamentals, a
successful sales and marketing strategy, strong cash flow generation,
attractive future growth prospects and an experienced management team with a
proven track record have all played their part in generating significant
investor interest in ALROSA and the Offering. We will endeavour to further
develop ALROSA as a public company and to increase value for all its
ALROSA is the largest diamond mining company in the world based on rough
diamond production volume. Its strategic focus is on mining and distribution
of rough diamonds. In 2012, ALROSA produced 34.4 million carats of rough
diamonds, accounting for 27 per cent of the world’s rough diamond output based
on carat volume, according to Kimberley Process statistics. In the six months
ended 30 June 2013, the Company produced 17.1 million carats of rough
ALROSA operates six open-pit mines, three underground mines and thirteen
alluvial placers. The Company’s principal mining and processing operations are
located in Yakutia, in the north-eastern part of Russia, and Arkhangelsk
Region, in the north-western part of Russia.
Based on published reserves, ALROSA has the largest JORC Code-compliant
reserve base and its JORC Code resource base is one of the largest in the
industry. As at 1 July 2013, the Company’s total JORC Code-compliant measured,
indicated and inferred resources amounted to 973.0 million carats (68.3%
measured and indicated) with an average grade of 1.38 carats/tonne; and its
JORC Code-compliant proven and probable ore reserves were 607.5 million carats
with an average grade of 1.34 carats/tonne, based on an independent expert
report prepared by Micon International, mineral industry consultants. In
addition, ALROSA owns a 32.8 per cent interest in Catoca Limited, which mines
the Catoca kimberlite pipe in Angola.
ALROSA has its own marketing and distribution network with offices in all key
diamond distribution hubs across the world. In 2012, a majority of ALROSA’s
diamonds were sold through long-term contracts, with the rest sold mainly
through competitive sales (auctions and tenders) and spot sales. The Company’s
customer base includes cutting/polishing companies, vertically integrated
jewellery groups and wholesalers.
In addition to its diamond mining and distribution business, ALROSA has some
non-diamond assets in adjacent business areas. The Company plans to gradually
dispose of selected non-diamond assets over the period of 2013-2020.
Under IFRS, ALROSA’s revenue was RUB 82,229 million in the six months ended 30
June 2013, RUB 76,529 million in the six months ended 30 June 2012 and RUB
150,880 million in 2012). Under IFRS, the Company’s profit amounted to RUB
14,616 million in the six months ended 30 June 2013, RUB 16,191 million in the
six months ended 30 June 2012 and RUB 33,634 million in 2012.
Following the Offering, Company’s largest shareholders include the Russian
Federation that holds approximately 43.9 per cent interest and Yakutia holding
approximately 25 per cent interest.
ALROSA is committed to on-going improvement in corporate governance. It has
prepared and published its audited annual IFRS financial statements since
2002, and produces its IFRS reviewed statements on a quarterly basis. The
Company’s Supervisory Board currently includes five independent non-executive
directors, according to Russian standards of independence.
Leonid Fink, Tony Friend, Galyna Kulachek, +44 207 457 2020
Anton Karpov, +7 (495) 660 05 91
ALROSA Media Centre
+7 (495) 620 92 50, ext. 13-21
ALROSA Investor Relations Centre
+7 (495) 745 58 72
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