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Reuters on Saturday, as Moscow kickstarts a privatisation drive. A share issue by Alrosa — the world’s largest producer of rough diamonds in carat terms — is Russia’s largest privatisation in just under four years as the country seeks ways to bolster finances which have been hit by weak oil prices. According to the source close to the placement, the sale of a 10.9 percent stake was priced at 65 roubles per share, bringing in around $820 million. The Kommersant newspaper reported earlier this week that officials had been targeting an issue price of 71 roubles per share, citing unnamed sources. The pricing represents a discount of 3.8 percent to the closing price on Friday. Government officials and Alrosa were not immediately available for comment. It is not yet clear how much of the demand came from foreign institutional investors, who have largely shunned Russia since the country was hit by Western sanctions and slumping oil prices in 2014, depressing stock prices. Before the placement, the Vedomosti newspaper reported that the Russian Direct Investment Fund, a state-backed vehicle, would be an anchor investor. Other companies slated for privatisation this or next year include oil companies Rosneft and Bashneft, VTB bank and shipping company Sovkomflot. The $820 million raised from Alrosa’s sale compares with around $11 billion expected for the sale of a stake in Rosneft, which officials have said may be more difficult. Alrosa accounts for over a third of the world’s rough diamond production and it has the largest reserves. It reported record earnings in the first quarter as the market for diamonds used in jewellery and for industrial cutting tools and abrasives recovers. “We find Alrosa’s long-term story attractive,” analysts at Russian brokerage Aton said in a recent report. They said the stock benefits from a low enterprise value to earnings multiple of 4.3 compared with rivals and a dividend yield of around 10 percent (Reuters). The Russian Federation is the largest diamond-producing nation in the world. In October 2013, Alrosa, vying with De Beers for the mantle of the world’s largest diamond producer, made an IPO raising $1.3 billion. The Russian government and the Republic of Sakha (Yakutia) sold a combined 14% stake, in equal shares, while Alrosa offered about 2% in treasury stock. Buyers included U.S. asset management group Lazard and investment firms Capital, Highbridge, OppenheimerFunds and PIMCO, as well as a state-backed fund, the Russian Direct Investment Fund, or RDIF, whose mandate is to co-invest with private partners.]]>