Yakutia chief urges municipalities to hold on to Alrosa shares
YAKUTSK. March 22 (Interfax) - Yegor Borisov, the head of Yakutia, has expressed his opposition to privatization of the stakes in Alrosa held by Yakutia and districts in Yakutia and called on the districts not to sell their shares in the diamond monopoly.
"We are not going to privatize the Alrosa shares. We are appealing to the district heads, which are the owners of shares: these shares should not be a topic for discussion. They will come at you. Stand your ground. Don't sell the shares. Our government must be united," Borisov said at a meeting with local government representatives on Wednesday.
Yakutia must protect its shares, despite potential "pressure, discussions and enticements," he said.
Borisov pointed out to the district heads that under the five-year agreement Russia and Yakutia concluded following Alrosa's IPO in October 2013, their stakes must be equal to each other and be sufficient to ensure control of the diamond monopoly.
It was reported earlier that state property agency Rosimushchestvo's stake in Alrosa might decline from the current 33% to 29% plus one share in 2017-2019. A source at an agency in the financial and economic wing of the government told Interfax that those parameters remain in the three-year privatization plan approved by the government in February 2017.
Rosimushchestvo can sell at most 8% of Alrosa shares and still leave Russia and Yakutia with a combined controlling stake.
However, sale by Rosimushchestvo of either 8% or 4% of shares will require amendments to the shareholder agreement, and participation of the Yakutia districts in the sale will require amendments to local law.
The privatization plan stipulates coordination of share sales held by Yakutia (25% plus one share) and the districts (8%), the source said. Yakutia's stake is safeguarded at the legislative level. The regional leadership has repeatedly spoken out against reducing the stake in Alrosa, one of the region's leading sources of employment and tax revenue.
