Russian state-owned diamond miner Alrosa, which starts a road-show for a share sale on Monday, is valuing itself at up to $8.8 billion under the offering - below a previous forecast of up to $15 billion. Alrosa is the world's top diamond producer by output in carats and will be one of a handful of listed diamond miners. The company competes with Anglo American-owned De Beers, the world's biggest diamond producer by sales value.
Alrosa said on Monday it had set the price range for its share sale at between 35 roubles and 38 roubles per share. The range would value the 16 percent stake being offered at between $1.3 billion and $1.4 billion and the whole company at between $8.1 billion and $8.8 billion, according to Reuters calculations. In May the miner said it saw its valuation in a range of $9 billion to $15 billion.
Russia's federal and regional governments will sell 14 percent of Alrosa's shares, using the cash to bolster state finances. An additional 2 percent will be sold by an Alrosa subsidiary and these proceeds will be used to pay down debt. Russia's government does not plan to sell any additional shares for at least six months after the deal, First Deputy Prime Minister Igor Shuvalov said on Monday through the government's press-service.
The announcement of the offer price is expected on October 28. Alrosa's shares closed at 34.75 roubles on Friday, valuing the company at around $7.9 billion. Alrosa also said its supervisory board intends to recommend increasing the minimum level of the company's dividend payments to 35 percent of its net profit under international accounting standards starting from 2013.