Acquisition of Kristall approved
At its meeting on September 24, the Alrosa Supervisory Board approved the acquisition of a 100% stake in Joint-Stock Company “Production Corporation Kristall from the Russian Federation represented by the Federal Agency for State Property Management (Rosimushchestvo) on the terms set forth in the decree of the Russian Government.
According to the previously approved Russian Government decree, the value of the 100% equity interest in Kristall was determined on the basis of an independent appraiser's report at RUB 1,886 million. Alrosa’s Supervisory Board assigned the company’s Chief Executive Officer to enter into a sale and purchase agreement for Kristall's shares under the conditions proposed by Rosimushchestvo. By the end of the year, the management is to prepare and submit an action plan to operate and develop Kristall as part of Alrosa Group to the Supervisory Board for consideration.
“Despite the fact that Alrosa is currently a key supplier of rough diamonds to Kristall, it accounts for as little as 0.5% of Alrosa’s total sales of rough diamonds. The deal value is less than 1% of Alrosa’s net assets and, according to our estimates, the purchase price will not exceed Kristall’s net assets at the date of the transaction,” says Alexey Philippovskiy, Deputy CEO of Alrosa.
The sale and purchase agreement is expected to be signed by the end of September, with the deal to be closed in the first half of October. After that, we will start developing a plan to integrate Kristall into ALROSA Group” Alexey adds.
Currently Kristall is the leading polished diamonds manufacturer in Russia and Europe. It processes over 200,000 carats of rough diamonds per year, with 90% of diamond feedstock supplied by Alrosa. Kristall’s international operations are run through its trade offices in the US, Hong Kong, and Belgium. The company’s total headcount exceeds 1,800 people.
