Goldman Sachs, Morgan Stanley, JPMorgan Compete for Alrosa Sale

Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. were chosen to compete to handle the government’s sale of a stake in OAO Alrosa, the world’s largest diamond miner by output, the Russian Economy Ministry said in a statement on its website.

The government plans to sell 7 percent of Alrosa, according to a Feb. 5 statement by the nation’s property-management agency. Alrosa, 51 percent owned by the Russian government, accounts for one-quarter of global diamond production by value, according to its website.

Russia is reviving efforts to reduce the government’s role in the economy after Rosneft, Russia’s largest oil company, agreed in October to take over TNK-BP, owned equally by London- based BP Plc and a group of billionaires, for $54.8 billion in the third-biggest petroleum acquisition. Russia raised 159.3 billion rubles ($5.3 billion) through the sale in August of 7.6 percent in OAO Sberbank, the nation’s largest lender. Other companies earmarked for privatization this year include lender VTB Group, shipper OAO Sovcomflot and Russian Railways.

The government wants to raise 260 billion rubles to 270 billion rubles from no fewer than eight asset sales in 2013, up from an estimated 223 billion rubles this year, Economy Minister Andrei Belousov said in televised remarks at a Cabinet meeting in October.

Goldman Sachs, JPMorgan and Morgan Stanley are among 23 foreign and domestic banks selected to advise on a 1 trillion- ruble, three-year asset sale program. The three banks, along with Zurich-based Credit Suisse Group AG, helped advise on last year’s Sberbank asset sale. Separately, New York-based Goldman Sachs said this month it had been hired by the Kremlin to help improve Russia’s image and attract more institutional investors.

Alrosa, based in Mimy, Russia, and traded on the over-the- counter market in Moscow, advanced 1.1 percent to 31.88 rubles. The stock has gained 6.3 percent this year.

To contact the reporters on this story: Scott Rose in Moscow at rrose10@bloomberg.net; Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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