New York, United States — MININGREVIEW.COM — 22 March 2011 – Alrosa “’ the world’s biggest diamond company by production last year “’ plans to raise as much as US$3 billion in an initial public offering in 2012, according to chief executive officer Fyodor Andreev.
“My personal target is to prepare the company so we’ll be ready to do an IPO in the middle of next year,” Andreev said in an interview with Bloomberg Television. “Alrosa is studying the U.K., Canada, Hong Kong and Russia as locations,” he added.
“Alrosa, “’ Russia’s state-owned diamond monopoly “’ will sell about a 20 to 25% stake and use the money to fund expansion and help repay its US$3.2 billion of debt,” Andreev continued. “Big banks like Goldman Sachs, JPMorgan, Morgan Stanley and VTB Bank” will be invited to tender as advisers,” he said.
A sale would make Alrosa by far the biggest listed diamond company. De Beers, the largest producer by sales, exited the Johannesburg exchange in 2001, while gems make up less than 5% of Rio Tinto Group and BHP Billiton Limited output. That may allow Alrosa to tap pent-up investment demand, after rough diamonds rose as much as 90% from a trough during 2009.
Alrosa, based in Siberia’s Yakutia region, produced 34 million carats of diamonds last year, compared with De Beers’s 33 million carats. “It aims to boost output to 40 million carats by 2018, investing about US$7.5 billion in new mines and in underground digging at its open pits,” Andreev revealed.