(IDEX Online News) – Russian miner Alrosa says the price range for its offering of shares to be traded in Moscow has been set at RUB35 and RUB38 ($1.08-$1.18) per share.

 

The announcement of the offer price is expected on October 28.

 

The offering will involve the sale of 7 percent of shares owned by the Russian Federation and by the Republic of Sakha (Yakutia), where most of the company’s mines are located.

 

Both the Russian government and OJSC RIC Plus, wholly-owned by the Republic of Sakha, will offer up to 515,547,593 shares representing a total of around 14 percent of Alrosa's shares.

 

In addition, Wargan Holdings Limited, a Cyprus company controlled by Alrosa, will offer up to 150,237,555 shares representing approximately 2 percent of the miner's shares. The net proceeds of the offering to be received by Alrosa from the shares sold by Wargan Holdings Limited will be used to repay existing debt.

 

Alrosa said that VTB Capital plc may buy up to 10 percent 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 percent of the shares at the offer price.

 

Ilya Yuzhanov, Chairman of the Supervisory Board, commented: “The company looks forward to meeting Russian and international institutional investors and updating them on its business and development strategy. As the world's largest producer of rough diamonds, Alrosa is well placed to benefit from the growing demand for diamonds on the international market."

 

Alrosa's Supervisory Board will recommend to shareholders to increase the minimum dividend payments to 35 percent of net profit under IFRS accounting rules, starting with the annual dividend payment for 2013, and to implement relevant changes in the company’s dividend policy.

 

"Our plans to consistently increase cash flow and execute our strategy at each stage of the company’s development create a strong platform for rewarding our shareholders and drive higher return on investment,” Alrosa said.