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Alrosa Share Offering Attracts Oppenheimer, Lazard Funds

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Oct. 28 (Bloomberg) -- OAO Alrosa, Russia’s diamond producer, raised about $1.3 billion in an oversubscribed share sale from investors including Oppenheimer Funds Inc. and Lazard Ltd.'s asset-management unit, First Deputy Prime Minister Igor Shuvalov said.

“The fact that the deal was oversubscribed and the quality of investors is proof that the sale went successfully,” Shuvalov said today in Moscow.

The Russian government and the republic of Yakutia, where Alrosa is based, sold a combined 14 percent stake in the offering, with the company selling 2 percent itself. The sale is part of a state strategy to attract more international investors to Russia and establish Moscow as a global financial center.

The stock sold at 35 rubles a share, the lowest end of the price range. Sixty percent was allocated to U.S. investors and 14 percent to Russian buyers, Vedomosti reported, citing people it didn’t identify. Lazard bought $300 million of the shares, according to the newspaper.

Funds from Lazard and Oppenheimer took a “significant volume” of the portion available to U.S. investors, said Sergei Arsenyev, managing director of investment banking at Goldman Sachs Group Inc. Alrosa will trade the shares on the Moscow exchange and has no plans to list them overseas, he said.

Oppenheimer didn’t respond to a request for comment. Lazard declined to comment.

While the price range was set at 35 rubles to 38 rubles a share, initial proposals came in at 32 rubles, Shuvalov said. “We took the risk and insisted on 35 rubles,” he said.

Alrosa rose 0.6 percent in Moscow trading to close at 35.15 rubles.

The Russian Direct Investment Fund formed a group of foreign institutional investors from North America, the Middle East, western and northern Europe and Southeast Asia to invest in the shares, the fund said today in a separate statement.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

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