Report: ALROSA to spend auction money on buyback of 10% in unit

MOSCOW, Feb 20 (PRIME) -- Russian uncut diamond mining giant ALROSA plans to spend 30.3 billion rubles it raised from a sale of its natural gas assets to Novatek on early debt redemption and a buyback of 10% in subsidiary ALROSA-Nyurba, ALROSA CEO Sergei Ivanov said in an interview to Rossiya 24 television channel broadcast late on Monday.

“We are now looking at our liquidity forecast, as we had good sales in January. We expect high demand in February–March. This is why, comparing all issues connected to liquidity of the company, we will soon make a decision where to spend the money and submit it to the supervisory board,” Ivanov said.

“I am sure that part of the money will be spent on early redemption of those insignificant loans that the ALROSA group still has. We redeemed debt ahead of schedule last year, and I think we will redeem more loans early this year with the money. In addition, we are discussing a purchase of 10% in ALROSA-Nyurba with the Sakha republic (Yakutia). This is a core asset, in which ALROSA owns almost 90%. So, we will spend some of the money on that, maybe a third of it.”

The sale will not have an impact on the net profit or dividend payments of ALROSA, only on its cash flow. The company also has no plans to sell non-core assets soon, he said.

In 2018, ALROSA plans to produce about 36.6 million carats of diamonds, while next year the output will grow to 37.5–38 million due to expansion of capacities of some projects, he added.

(56.3438 rubles – U.S. $1)

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