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EastRussia Bulletin: Verification Results of Alrosa - arrangements for the preparation and conduct of privatization are fully implemented
Last week, the results of a comprehensive audit of ALROSA, initiated by Yu. Trutnev and supported by President Vladimir Putin, also became known. During the audit, the largest transactions of the diamond mining company and its subsidiaries in 2008-2014 were studied. This audit revealed the ineffectiveness of a number of decisions in the field of debt policy and management of non-core assets during the presidency of the late Fedor Andreev. Nevertheless, experts emphasize that most of the non-core transactions were conducted by the previous management team.
As a result of the audit, it became known that the measures for the preparation and conduct of privatization were fully implemented, however, the claims relate to the implementation of the program to increase the company's investment attractiveness: we are talking about the inefficiency of a number of long-term financial investments. Thus, the Accounts Chamber believes that some of the 2008 non-core enterprises sold by the company in 2014-19 with a total value of 1,3 billion rubles were sold at a price below market. For example, ZAO Hotels ALROSA was sold in 2013 to OOO Nord for 351,1 million rubles, which is only 125,5 million rubles more than ALROSA's investments in its development. The sale of a 92% stake in OJSC Northern Mining and Geological Company Terra was closed in 2012. Its amount amounted to 16,6 million rubles, which is 15,6 million rubles less than the volume of the company's investments in the authorized capital of Terra.
Another complaint against ALROSA is ineffective debt policy. As established by the audit, the level of the company's credit load at the end of last year reached its maximum value since 2008 (coefficient 0,8 with a critical value of 1), which is mainly due to the devaluation of the ruble. The dynamics of net debt was also influenced by the deal to buy back gas assets (Geotransgaz and Urengoy Gas Company).
Despite all the claims, over the five years of Fyodor Andreev's work, diamond production has grown by 12%, revenue - more than 2 times, profit - 9 times, tax deductions - almost doubled, and dividend payments - more than 40 times. At the same time, the “total debt / EBITDA” indicator decreased by more than 2,5 times, which indicates an increase in the company's financial stability. In this regard, discrepancies in the assessment of the activities of the previous management of the company by the Accounts Chamber and experts suggest the emergence of new assessments and investigations in the future. It is also possible to raise the question of changing the company's strategy, if the previous one was not quite effective.