Russia Said to Raise $816 Million From Diamond Miner Sale

Updated on
  • Share sale book said to have closed at about 4:30pm in Moscow
  • Government met Friday night to make decision on sale

Russia raised 52.2 billion rubles ($816 million) from the sale of Alrosa PJSC, the world’s largest diamond miner, according to a person with knowledge of the deal, the country’s biggest privatization in three years marred by economic uncertainty.

Shares were priced at 65 rubles a piece, the person said, a 3.8 percent discount to the stock’s Friday closing price. Alrosa’s book closed on Friday at about 4:30 p.m. Moscow time, with the formal pricing and allocation announcement planned for Monday morning, two people familiar with the process said. Officials had been looking to sell the Alrosa stake at 71 rubles a share, Kommersant reported on Monday.

This is first of three major offerings approved by President Vladimir Putin for this year as the government seeks cash to bridge the widest budget deficit since 2010. Russia’s economy has had to absorb some blows, from the collapse of oil prices to punitive sanctions over the annexation of Crimea. 

Alrosa’s shares closed down 0.1 percent at 67.55 rubles in Moscow, valuing the company at 498 billion rubles ($7.8 billion). Russia’s benchmark Micex Index added 0.6 percent. Alrosa’s shares are up 21 percent this year, which compares with a 7.6 percent gain for the Micex. At the same time, its estimated price-to-earnings ratio for the next 12 months is the lowest since December at 5.4, according to data compiled by Bloomberg.

In 2013, a 16 percent stake of the gems miner sold by the government and the company itself raised $1.3 billion.