Russia's largest diamond miner, the ALROSA Diamond Mining company goes public went public. This on the last day of October on the Moscow Stock Exchange. The initial public offering for the ALROSA diamond mining company consisted of 16 percent of the company's shares. Some of which belong to the Russian government and the Republic of Yakutia. The targeted price per share is ranged from $1.o8 to $1.18, according to the companies presale estimate available at press time. This would change the companies capitalization from $8 billion to 8.6 billion.
During the lead up to going public, Interfax reported that the order booking for the IPO was weak. Therefore, this led to speculation that the offering was to be at the lower end of the price spectrum. The order was purposely booked closer to October 25 so the possibility of remained that investors with deep pockets and institutional investors could place significant orders at the last minute. "Going public will mean more transparency for the company," said an ALROSA representative as he suggested that the money from the IPO will not go to ALOSA's balance sheet as the stock belonged to the shareholders.
He did say a portion of the proceeds would go to the funding infrastructure in the Yakutia. Also in the deal, Alrosa sold its gas deposits in Yakutia to the Russian oil and gas company and to Rosneft for 1.38 billion. The money from the sale will be used to pay down the miner's outstanding debt.
Production is up for Alrosa; the company mined 9.9 million carats in the third quarter of 2013, up 9 percent from the previous years. The company's overall production for the year reached 27.9 million carats, a 6 percent increase from last as well. The company aims to mine 36.4 million carats total by the end of 2013. Alrosa implemented a number measures in response to continued stagnation plaguing the diamond industry.
Once such response was the correction of prices on its diamond boxes for jewelry collection quality diamonds, approximately 4 percent lower; this happened despite the fact the company raised prices on its industrial quality goods by 1 percent. Another change made allowed customers to reject up to 20 percent of their volume purchasing. Beginning July 2013 ALROSA diamond mining company started to allow a delayed payment option of the value added tax. Benefiting Russian manufacturers by up to 18 percent.
Despite allowing more flexible prices many manufacturers are stating that the price of manufacturing some polished 1 carat diamonds are too expensive to the extent they are not worth the production costs. The rough that is most interesting to polish at the moment are the 4 grainers to 6 grainers, which produce diamonds of .30 to .90 carats," said Alexander Malinin, the head of the Brillianty Facility. He maintains that even the prices for these items are 3-5 percent too expensive.
http://en.wikipedia.org/wiki/ALROSA
ALROSA Diamond Mining Company went public.