At the absentee voting on September 10, the ALROSA Supervisory Board will consider terminating its participation in the share capital of PJSC ALROSA-Nyurba by way of voluntary liquidation of the company. In case of the Supervisory Board’s approval, voluntary liquidation will the submitted for consideration to the Board of Directors of ALROSA-Nyurba, and then to the Extraordinary General Meeting of the ALROSA-Nyurba shareholders.
Today, PJSC ALROSA holds a 97.4878% stake in ALROSA-Nyurba.The remaining 2.5122% of shares belong to minority shareholders. The shares of ALROSA-Nyurba are quoted in the open market (the equities market of the Moscow Exchange).The company’s 2018 revenue amounted to RUB 44 billion, net profit – to RUB 16.6 billion.
ALROSA-Nyurba holds two subsoil licenses (Botuobinskaya and Nyurbinskaya pipes), however it is not directly engaged in any production operations.The whole production cycle – from geological exploration, mining and rough diamond processing to sorting, presales preparation and subsequent sales – is carried out on contract terms by ALROSA’s business units: Nyurba Mining and Processing Division, Vilyuyskaya Exploration Expedition, United Selling Organization, and Diamond Sorting Center. ALROSA-Nyurba currently employs 30 people, most of whom are management staff.
As part of the strategy aimed at improving the management efficiency and optimizing the ALROSA Group structure, ALROSA’s management deems it expedient to consolidate core assets, including licenses, on the parent company’s balance sheet by liquidating ALROSA-Nyurba.
If at the meeting on September 10 the Supervisory Board supports the Company’s management and resolves to terminate its participation in the share capital of ALROSA-Nyurba, the matter of voluntary liquidation will be submitted for consideration to the Board of Directors of ALROSA-Nyurba, and then to the company’s Extraordinary General Meeting of Shareholders.
In case of a positive decision by the ALROSA-Nyurba shareholders, the company will be liquidated in strict compliance with legal requirements, with the process expected to be completed by the end of 2020.According to the law, upon the completion of settlements with creditors, the remaining funds of the liquidation fund of ALROSA-Nyurba will be distributed among the shareholders in proportion to their stakes in the company’s share capital.
Liquidation ofA LROSA-Nyurba will not affect the accounting of ALROSA Group under the IFRS.
Sergey Ivanov, ALROSA’s CEO:
– The company’s top management believes that consolidation of core mining assets on ALROSA’s balance sheet will result in the improvement of their management efficiency, removeduplicate functions, cut administrative and management costs, eliminate redundant operations in sorting and sale of rough diamonds, etc. All of this will lead to reduced costs and increased earnings before taxes. I would like to note that the Republic of Sakha (Yakutia) will not lose anything in terms of taxes, as ALROSA will pay taxes instead of ALROSA-Nyurba, while the cost savings will mean bigger tax base.Besides, last year we entered into an agreement on social and economic development of Nyurbinsky Ulus on the same terms and in the same volumes as with ALROSA-Nyurba. We will also closely monitor that the content and further distribution of the liquidation fund is as transparent as possible and equally takes into account the interests of all shareholders of ALROSA-Nyurba.
New Source : diamondworld
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
