The supervisory board of PJSC Alrosa approved the liquidation of its 97.5%-owned PJSC ALROSA-Nyurba unit, as part of the Russian diamond producer's plan to consolidate core assets to improve efficiency.
ALROSA-Nyurba holds the subsoil licenses for the Botuobinskaya and Nyurbinskaya kimberlite pipes in Russia's Sakha Republic, but it is not directly engaged in any of the mining operations. The unit, which employs 30 people, posted a 2018 net profit of 16.6 billion Russian rubles.
The liquidation proposal will be forwarded to the ALROSA-Nyurba board before being considered during an extraordinary shareholders meeting in early November, according to a Sept. 11 release.
Alrosa expects the liquidation process to be completed by the end of 2020. Upon settlements with creditors, the remaining funds from ALROSA-Nyurba's liquidation fund will be distributed among shareholders.
In the second quarter, Alrosa's net profit plunged 47% year on year to 13.4 billion rubles due to lower revenue and shrinking margins. The company's August sales also decreased year on year, to US$181.8 million from US$294.9 million, due to macroeconomic and industry headwinds affecting the midstream market.
As of Sept. 10, US$1 was equivalent to 65.41 Russian rubles.
