Diamond giant's $10bn IPO

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The Independent Online

Alrosa, the giant Russian company that mines about a quarter of the world's diamonds, has become an early favourite to be the largest flotation of 2008.

The company produces 97 per cent of Russia's diamonds and could be worth $10bn (4.9bn) if it came to market. Bankers said London would be the obvious place for it to list.

The company made a net profit of $599m last year. Sergei Vybornov, the president of the company, confirmed that a flotation was in the pipeline. "In the nearest future, I mean within a year or a year and a half, we are planning an IPO," he told a Russian-Japanese business forum in Osaka.

Alrosa is 37 per cent owned by the Russian government, while the Yakutian government owns a 32 per cent stake. The company's workers hold 23 per cent of the shares, while the remaining 8 per cent is held by eight regional governments.

The Russian government plans to raise its Alrosa stake to 50 per cent plus one share through an additional issue of shares. The company has close links to Russian president Vladimir Putin which may concern potential London investors.