IAN state-owned diamond miner Alrosa yesterday raised $1.3bn (£810m) through a public offering in Moscow, with shares sold at the bottom of the price range.
Russian federal and regional governments together sold a 14 per cent stake in the miner and an Alrosa subsidiary sold two per cent to repay existing debt.
The share sale was said to be oversubscribed by around $400m (£248m), with investors including US asset manager Lazard and investment firms OppenheimerFunds, Pimco, Capital and Highbridge, as well as the state-backed Russian Direct Investment Fund (RDIF).
A flotation of the world’s largest diamond miner based on volume has been planned for over a decade, as the Russian government looks to divest state assets and bolster its finances.
Analyst views were mixed as to the success of the sale, with some suggesting that the low price highlighted the slow progress of – and limited interest in – Russia’s privatisation plan.
“At least they got something, but not that much, and it was way below what they had originally planned,” said Uralsib economist Alexei Devyatov.
Alrosa’s offer price of 35 roubles per share was right at the bottom of the proposed range of 35 roubles to 38 roubles per share, putting the firm’s market capitalisation at 258bn roubles (£5bn).
However, Investec called the float “an interesting move in the continued privatisation campaign in Russia” and said it believed the company would generate market interest, “given strong long term fundamentals for the diamond market”.
Following the public offering, Russia’s federal and regional governments will own 43.9 per cent and 25 per cent respectively.
The government is prevented from further privatisation of the company for a period of 180 days.
Goldman Sachs, JP Morgan, Morgan Stanley and VTB Capital are joint global coordinators and joint bookrunners on the flotation.
Renaissance Capital is a joint bookrunner.