Russian State-run diamond miner Alrosa is considering raising funds through a share issue to the public, the Moscow Times reported.

An IPO will see Alrosa change its legal status, becoming a joint-stock company, which may sell shares to individual investors in the Siberian republic of Sakha, also known as Yakutia, where its mines are located.

Changing Alrosa's legal status would benefit minority shareholders, who want to sell their shares but cannot do so at the moment.



"The (financial) crisis is not over, a second wave is expected. In these conditions, the company needs to be able to raise capital, which is only possible after creating a joint-stock company," Alrosa President Fyodor Andreyev said.

"It's easier for a joint-stock company with a transparent management system to raise cheap loans."

Andreyev added that an initial public offering could also provide funds needed to develop a number of iron-ore fields in southern Sakha.

The Russian diamond giant's outstanding debt currently stands on $3.4 billion. Alrosa's debt grew during the global financial crisis because it focused on maintaining jobs and production.

Alrosa has yet to post its 2009 results, but did post a $1 billion loss in 2008.

No timeline has been set for Alrosa's IPO, but preparatory work has started, a spokeswoman told The Moscow Times.

Alrosa is divided between Russia's Federal Property Management Agency, which owns 51% of its share, the Sakha regional government (32%) various diamond-mining regional districts (8% jointly) and small investors, who collectively own 10%.

"Ideally, we want to turn Alrosa into a people's company. A public offering will allow the company's staff and residents of the republic to acquire shares," Andreyev said.