Moscow hoping to raise $889m from Alrosa privatisation – date set soon

Alrosa privatisation: The Russian government is hoping to raise $889m through the sale of a 10.9% stake in the Alrosa diamond mining company, with OppenheimerFunds, Lazard and the AMG’s  Genesis Asset Management reported to be ready to spend about $450m to buy 3.09%, 0.99% and 0.8% respectively, sources close to the company said over the weekend. A decision on the timing of the sell-off is expected to be made this week, after Sberbank  indicated that it was looking at a date some time in July.
The decision to sell off a stake in Alrosa was taken earlier this year as part of a wider attempt to shore up the hole left in Russia’s budget by the slide in oil prices through a comprehensive privatisation programme.
While Moscow has regularly sold stakes in some of smaller state companies over the years,  memories of the initial wave of privatisations that followed the collapse of the Soviet economy, and the creation of a fabulously wealthy group of oligarchs that ensued, remain raw.
“Previously, privatisation was mainly driven by the intention to adjust the structure of the economy and make it more efficient,”  Oleg Kouzmin, Russia economist at Renaissance Capital, told the FT earlier this year, after the heads of Alrosa, Rosneft, Bashneft, Russian Railways, state bank VTB, Aeroflot and Russia’s largest shipowner Sovcomflot had been  summoned to the Kremlin  to discuss the possible sale of state assets with President Putin. “Now, the issue of raising cash ….has become one of the reasons that privatisation is back on the agenda.”