Alrosa Diamond Shares to U.S., Russians For $1.3B

Russian state-owned diamond company Alrosa raised around $1.3 billion in its public offering of shares on the Moscow MICEX Stock Exchange with trading starting today at a price set by the company of $1.10 per share.

Investors included Oppenheimer Funds Inc. and Lazard Ltd., said First Deputy Prime Minister Igor Shuvalov. The Vedomosti newspaper, citing unnamed sources, reported that 60% of the shares were allocated to U.S. investors and 14% to Russian buyers. Lazard Ltd bought $300 million of the shares, according to the report.

Alrosa will trade the shares on the Moscow exchange and has no plans to list them overseas. The offer price implies a market capitalization for the miner of around $8.1 billion, at the lower end of initial forecasts.

Alrosa said that VTB Capital plc may buy up to 10% of the shares on offer within 30 days of the announcement of the offer price. And Sunland Holding SA, a wholly-owned subsidiary of Alrosa, has granted VTB Capital plc an option to require Sunland Holding SA to purchase the shares up to 10% of the shares at the offer price.

Alrosa is the largest diamond mining company in the world based on rough diamond production volume, and last year produced 34.4 million carats of rough diamonds, accounting for 27% of global rough diamond output based on carat volume, according to Kimberley Process statistics. The miner operates six open-pit mines, three underground mines and 13 alluvial placers.

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