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ALROSA Announces Pricing of Its Offering at RUB35 Per Ordinary Share



  ALROSA Announces Pricing of Its Offering at RUB35 Per Ordinary Share

Business Wire

MOSCOW -- October 28, 2013

ALROSA:

    NOT FOR DISTRIBUTION IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN

These materials are not for distribution, directly or indirectly, in or into
the United States (including its territories and possessions, any State of the
United States and the District of Columbia). These materials are not an offer
or solicitation to purchase or subscribe for any securities in the United
States. Securities may not be offered or sold in the United States absent
registration with the United States Securities and Exchange Commission or an
exemption from registration under the U.S. Securities Act of 1933, as amended
(the “Securities Act”). It is not intended that any part of the offering will
be registered in the United States or that a public offering of securities
will be conducted in the United States.

This document is an advertisement and is not a prospectus for the purposes of
Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU,
to the extent implemented in any relevant Member State and any relevant
implementing measure in the relevant Member State).

In any EEA Member State that has implemented the Prospectus Directive, this
communication is only addressed to and is only directed at qualified investors
in that Member State within the meaning of the Prospectus Directive. The
expression “Prospectus Directive” means Directive 2003/71/EC (and amendments
thereto, including Directive 2010/73/EU, to the extent implemented in any
relevant Member State) and includes any relevant implementing measure in the
relevant Member State.

This communication is only being distributed to and is only directed at (i)
persons who are outside the United Kingdom or (ii) investment professionals
falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth
entities, and other persons to whom it may lawfully be communicated, falling
within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and
(iii) above together being referred to as “relevant persons”). Any securities
described herein are only available to, and any invitation, offer or agreement
to subscribe, purchase or otherwise acquire such securities will be engaged in
only with, relevant persons. Any person who is not a relevant person should
not act or rely on this communication or any of its contents.

Information contained herein is not an offer or an invitation to make offers,
sell, purchase, exchange or transfer any securities in Russia or to or for the
benefit of any Russian person or any person in Russia, and does not constitute
an advertisement of any securities in Russia.

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
“ALRS”.

  * 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
    billion.
  * The Offering comprises the sale of existing Shares by the following
    shareholders:

       * 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
    decree.
  * 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
shareholders.”

About ALROSA

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
diamonds.

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.

Contact:

Media Enquiries:
College Hill
London
Leonid Fink, Tony Friend, Galyna Kulachek, +44 207 457 2020
or
Moscow
Anton Karpov, +7 (495) 660 05 91
or
ALROSA Media Centre
+7 (495) 620 92 50, ext. 13-21
E-mail: smi@alrosa.ru
or
ALROSA Investor Relations Centre
+7 (495) 745 58 72
E-mail: IR@alrosa.ru
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