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Alrosa is set to hold an initial public offering within one-and-a-half years
Alrosa [RTS: ALRS] is set to hold an initial public offering within one-and-a-half years, the Russian diamond monopoly head said Tuesday. The IPO is needed for the Russian government, Alrosa's major shareholder, to obtain a controlling stake in the company, which accounts for 97% of Russian and 25% of global diamond output. "In the nearest future, I mean within a year or a year and a half, we are planning an IPO," Sergei Vybornov told a Russian-Japanese business forum in Osaka. Alrosa is 37% owned by the Russian government, the Yakutian government owns a 32% stake, the company's employees 23% and the remaining 8% is held by eight districts in Yakutia. The Russian government is planning to increase its stake in Alrosa to 50% plus one share through an additional issue of shares, planned to be no less than 50% of the current stock, and the contribution of the former Soviet diamond producer Yakutalmaz's assets to federal ownership. The enterprise belongs to the Yakut regional government, while Alrosa leases its property for 10 billion rubles (about $350 million) annually. In late 2006, the federal government and the Yakut regional government came to terms on the transfer of Yakutalmaz assets to federal ownership. The full inclusion of the Yakutalmaz property would deprive Yakutalmaz of the right to raise Alrosa's rent - more than 60% of the republic's budget revenues. Russia is prepared to compensate Yakutia for "all the budget revenues it may lose". Alrosa yielded 15.579 billion rubles ($599 million) in 2006 net profit calculated to Russian Accounting Standards, a 3.2% rise, year-on-year.
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