MOSCOW — Common shares in ALROSA - Russia's largest diamond producer - have been frozen and registration of any assignment deals with them has been abandoned in fulfillment of resolutions to initiate law enforcement procedures. The resolutions were issued on March 25, 2005 on the basis of writs of execution of a district federal court of the Sakha Republic (Yakutia). Depository Clearing Company, which is the shareholder of record of these shares, has reported.
The freezing of ALROSA's shares has been triggered by the intention of the company's senior managers to secure shares from being bought up from its employees. Analysts estimate that 10 percent out of the total stake owned by the company's employees have already been bought up, and the company wants to secure the remaining 13 percent. A 36-percent stake in ALROSA is run by the Russian government, a 32-percent stake - by the Yakut government, 8 percent - by administrative units, and the remaining 23-percent stake has been owned by the company's employees until recently.
Analysts believe that freezing will help prevent massive buying-up of the company's shares prompted by the statement the company's president Alexander Nichiporuk has recently made concerning ALROSA's plans to be rendered an open joint-stock company. If this is the case, the company's capitalization will be evaluated at USD5.6bn. Yet, freezing of the shares will still leave the company of interest to big bargain hunters, who are sure to keep buying shares up. A source has reported that before the company's shares were frozen, they had been traded at USD6,000-7,000 per share.