Long-term investors may buy out 70% to 100% of the company’s shares offered within its SPO on the Moscow Exchange under accelerated procedure
(vedomosti.ru) - Long-term investors may buy out 70% to 100% of ALROSA’s shares put up for sale within its secondary public offering on the stock exchange, Interfax reported citing two sources close to the preparation of this deal. The SPO can be held in the next two weeks, according to the sources of the Vedomosti Daily. The sources of Interfax claim that the transaction will take place in the form of accelerated collection of applications.
The portfolio investors of ALROSA – the funds (such as Oppenheimer and Lazard), which acquired interest in the company’s equity capital during the IPO in October 2013 - have confirmed their intention to participate, "although, of course, there is a difference between the preliminary applications and final offers," said one of the Interfax sources.
“Real interest towards the equities of ALROSA is very great,” Vedomosti’s source close to the company said.
The Russian Direct Investment Fund will take part in the stock placement, the source of Interfax said. The fund will participate in the transaction in the proportion of one-third of its own assets - two-thirds of assets from investors (Arab and Asian), said one of the sources. The placement will be in the form of accelerated privatization deal, said one of the Interfax sources. "It's not even an SPO, it is an accelerated privatization transaction, without the prospectus and memorandum. Typically, in a good market, such transactions are closed by banks within a couple of days," he explained.
Lazard’s spokesperson declined to comment on whether the fund will buy a stake in the course of this privatization; representatives of Seberbank, the Ministry of Economic Development, Ministry of Finance, and Oppenheimer Fund have not yet responded to the inquiries of Vedomosti.
Meetings with potential investors regarding their participation in the privatization of a 10.9% stake in ALROSA were held till the end of June, and the decision to open the bid book will be based on the results of the road show. It is planned to place the state-owned stake on the Moscow Exchange and its sale may help to raise no less than 60 billion rubles, Alexei Ulyukayev, Minister for Economic Development said in an interview to Russia 24 TV Channel in May. Currently, the company's market capitalization is 508 billion rubles and the share of 10.9% is estimated on the Exchange at 55.3 billion rubles.
Conversations with investors have been going on since the end of May, as it is known by a source Vedomosti has in one of the investment banks, which was offered to buy a stake in the diamond miner. ALROSA has already visited South-East Asia and North America, where it held a non-deal road show with a presentation for investors (the document is available at Vedomosti), said another investment banker.
ALROSA's representative adds that there was no classic road show involving underwriters, but confirms that there was a series of meetings with investors held in the US, UK and Singapore. Prospective buyers have an interest in the company, the company’s representative believes.
