OREANDA-NEWS. November 17, 2010. President of ALROSA Fyodor Andreev held a regular working meeting with the company’s management. The agenda included issues relating to the Company’s current financial status and sales policy, operations of ALROSA subsidiaries and affiliates, current market trends and plans of future development, reported the press-centre of ALROSA.

In October ALROSA sold approximately USD 250 million worth of rough and polished diamonds. In Q4 it plans to sell a total of circa USD 680 million of rough and polished goods.

The President stated that the task set by the Supervisory Board in 2010 to ensure the reduction and restructuring of ALROSA debt obligations had been successfully implemented. The Company’s total debt portfolio has now been reduced by USD 550 million and currently amounts to USD 3.25 billion. At present, after the successful placement of ruble and euro bonds, more than 90 per cent of the Company’s obligations are long-term loans, while, at the beginning of 2010, conversely, it was short-term loans with high interest that made up more than 80 per cent of the debt portfolio. As a result of the restructuring, the Company has reduced its interest payments almost by half.

The management reviewed the operations of the Company’s subsidiaries and affiliates. The key mid-term target is to ensure material tightening of control over the operations of the subsidiaries and affiliates, also through their comprehensive audit to be carried out in 2011.

ALROSA expects that rough diamond prices will continue to grow in the near future, geared by a disparity between demand and supply. At the same time ALROSA believes that major diamond producers in shaping their price policies must be focused on maintaining overall market stability, as the speculative factor poses a potential threat for the diamond business.

Discussing the implementation of the joint plan, agreed by the two largest shareholders of ALROSA, on its reorganization into an open stock company Fyodor Andreev once again spelled out the stand of the management in this respect. Going public would be expedient from the economic point of view, if it gave ALROSA instruments to increase capitalization and raise capital to expand production. Maintaining the current parameters in the mid-term perspective would result in weaker potential, shrinking production, and, consequently, more labor redundancies. 

The meeting also discussed ways to make the Company’s system of management more efficient, including the possible reduction of the ALROSA Executive Committee membership. Along with that, the implementation of the Company’s social programs and obligations was discussed, in particular, crediting ALROSA employees on preferential terms in OJSC MAK Bank.