ALROSA is selling out its non-core assets. The diamond mining holding is planning to auction its tourist business, including four hotels in Moscow, Mirny, Yakutsk and Arkhangelsk, a boarding house in Anapa and a hotel under construction, the Northern Palmyra, in St. Petersburg. Experts say that this is a logical step. Russian companies have gone the Western way, says Dmitry Baranov, a leading expert of Finam Management.
"The company is focusing on its main business, mining diamonds, including their processing and marketing and will stick to it,” the expert says. “All other third-party services will be outsourced by way of tenders and auctions. In addition to financial benefits, the main logic is that it is economically advantageous. That is, you do what you know, what know how to do and what you want to do."
ALROSA estimated 100% of its hotels’ stock at nearly RUR 850 million. In addition, a potential buyer will have to pay RUR 1.8 billion of debt accumulated by the hotels. The head office gave that money to build the hotel in St. Petersburg. Those who wish to buy ALROSA’s tourist asset will be easily found, Artem Tsogoev, Project Manager of Trinfico Property Management, says.
"Most likely, these will be some companies specialized in developing hotel chains,” the expert says. “Or maybe these will be companies that specialize in opening new hotels. It is quite attractive to buy real estate facilities in several cities at once and start operating them under one’s own standards. These will be already functioning hotels. For instance, the ALROSA Hotel in Moscow has been running since the mid-1990s and it is quite a successful hotel."
ALROSA has got dozens of non-core assets in its portfolio. They include the Golubaya Volna Sanatorium in Gelendzhik and housing and utilities enterprises in Lensk and Mirny. ALROSA’s non-core assets also feature the Udachninsky Combine of Food Processing Factories and Mirny Printing House.
The diamond mining corporation owns 90.6% of Burevestnik, a research and production association in St. Petersburg, which is developing X-ray equipment. Besides, the holding’s portfolio contains a range of industrial companies: 99.7% in Vilyui GES-3 and also resource-extracting companies ALROSA-Gas and Irelyakhneft in Mirny.
Among ALROSA’s subsidiaries there are companies engaged in energy, industrial and residential construction. Three of them, ALROSA-VGS, ALROSA-Lenskstroy and ALROSA-Spetsburenie, are based in Yakutia. Two others, ALROSA-Vneshstroy Ltd and Hidrochicapa SARL, are operating in Angola. They were created for the construction of a hydro-electric power plant and this was one of the conditions for the development of one of the country’s diamond fields by ALROSA.
In addition, ALROSA owns 99.3% in SK ALROSA, an insurance company, and also MAK-Bank, a commercial bank in Mirny. It includes 11 divisions in Russian provinces.
Before the hotels, ALROSA got rid of its oil and gas assets. In 2009, it sold 90% of Urengoyskaya Gazovaya Kompania and Geotransgaz. VTB Capital paid $620 million to buy them, but in 2012 ALROSA is to buy the assets back from VTB Capital for as much as $870 million.
