In a move to improve efficiency, eliminate duplication and cut costs, ALROSA plans to liquidate the Moscow Exchange-listed ALROSA-Nyurba and bring all its assets and licences onto the parent company’s balance sheet.
ALORSA holds 97.5 percent of ALROSA-Nyurba stock. Though it holds two mining licences (for the Botuobinskaya and Nyurbinskaya pipes) and made a net profit of RUB 16.6 billion ($242.5 million) on revenue of RUB 44 billion ($666.8 million), the company has just 30 employees — mainly managers — and all its operations are outsourced to ALROSA operating organs.
Last year, ALROSA bought out the Yakutia government stake in the Nyurba diamond fields.
ALROSA Chief Executive Sergey Ivanov commented, “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, remove duplicate functions, cut administrative and management costs, eliminate redundant operations in the sorting and sale of rough diamonds.”
He added, “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 the way of taxes, as ALROSA will pay taxes instead of ALROSA-Nyurba, while the cost savings will mean a bigger tax base.”
The liquidation process is expected to be completed by the end of 2020.