Placement like a mirage

ALROSA talked about IPO with potential underwriters

Yesterday, ALROSA official representative Andrei Polyakov confirmed that the diamond mining company was negotiating the possibility of conducting an initial public offering of the company's shares, ITAR-TASS reports. At the same time, Mr. Polyakov stated that the negotiations were not of an official nature and were intended only to determine possible placement parameters. “ALROSA expects to become a public company. And we held discussions because we want to know the opinions of experts on the possibilities of conducting an initial public offering, but we are not conducting any official negotiations,” said Mr. Polyakov. The agency does not specify with whom the company negotiated. Mr. Polyakov himself was unavailable for comment.

The statement leaves a number of questions unanswered. Firstly, ALROSA is a closed joint stock company and at the same time is in the process of changing its shareholder structure : the state, which controls 37% of its shares, is carrying out procedures that will increase its share to a controlling one (50% plus one share). Purely technically, there is no possibility of entering the stock exchange in such a situation. Secondly, if the company is not ready for placement, and this is undoubtedly the case with ALROSA, then it is not entirely clear what parameters could be discussed with potential underwriters and how adequate the assessment could be in the existing situation. If we are not talking about specific terms of placement, nor about the share that will be placed on the stock exchange, nor about the need to attract a certain amount of funds, the subject of discussion looks extremely vague. Especially considering that even the assessment of the Yakutalmaz property complex, which was a stumbling block in the claims of the federal and Yakut state property funds, took more than one year, and its results were never finally announced (the preliminary assessment - 69 billion rubles - was announced only the President of the Republic Vyacheslav Shtyrov).

So far, therefore, the state does not have shareholder control over the company, and the government of Yakutia is deprived of the opportunity to manage it. All this was superimposed on the European Commission’s ban on selling ALROSA rough diamonds to South African De Beers, which, in fact, for many years was the main dealer of Yakut products. Currently, ALROSA, in addition to resolving structural issues, is also busy establishing its own sales system. Therefore, it is at least premature to talk about the possibility of a real IPO of a diamond mining company. “Most likely, these are just conceptual conversations that someday this will become possible,” believes Sergei Donskoy from Troika-Dialog.

Analysts find it difficult to evaluate the company even approximately in the current situation. When assessing the property complex of Yakutalmaz (back in 2005), experts tentatively estimated its value at more than $10 billion.

Anna LANDER