Alrosa to Sign $490 Million of Indian Diamond Deals (Update1)
March 11, 2010, 10:20 AM EST(Adds debt repayment plans in last two paragraphs.)
By Lucian Kim and Maria Kolesnikova
March 11 (Bloomberg) -- ZAO Alrosa, the world’s largest diamond company, will sign contracts to supply $490 million of the gems to India in the next three years as it seeks to double sales to the country.
The Russian state-run company will sign deals with Diamond India Ltd., Ratilal Becharlal & Sons and Rosy Blue during Prime Minister Vladimir Putin’s visit to India that begins today, Alrosa Chief Executive Officer Fyodor Andreyev said in a New Delhi interview. Prices and volumes will be reviewed quarterly.
The contracts will help Alrosa boost sales to India this year to as much as $1 billion, or a third of the company’s planned output, Andreyev said. Alrosa sold India more than $500 million of diamonds last year and $250 million in 2008, he said.
Alrosa overtook De Beers last year as the biggest diamond producer after the Russian government supported the company by purchasing about $1 billion of gems. De Beers slashed output 49 percent as demand for luxury goods slumped. India is the second- largest consumer of jewelry and polished diamonds after the U.S. Alrosa plans to sell $3.2 billion worth of diamonds this year, with Andreyev forecasting first-quarter sales of $850 million.
Alrosa may produce 34 million carats in 2010, about the same as last year, he said. De Beers will boost output more than 20 percent to about 30 million carats, Managing Director Gareth Penny said last month. A carat is equivalent to fifth of a gram.
Mirny, Russia-based Alrosa said Dec. 26 it’s seeking to cut debt 10 percent to $3.5 billion this year by selling bonds and stakes in units. The company has the option to sell 30 billion rubles ($1 billion) of Russian bonds, $1 billion of dollar bonds or $600 million to $700 million of syndicated loans to extend the maturity of its borrowings, Andreyev said.
About 70 percent of the debt is now short-term, he said.
--Editors: Tony Barrett, Simon Casey
To contact the reporters on this story: Lucian Kim in New Delhi at lkim3@bloomberg.net; Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net,
To contact the editor responsible for this story: Chris Kirkham at ckirkham@bloomberg.net; Stuart Wallace at swallace6@bloomberg.net.
