Alrosa to sell oil, gas assets for $600 mln-source

MOSCOW, August 14 (Reuters) - Russia's state diamond miner Alrosa will sell its domestic oil and gas assets to VTB bank (VTBR.MM) for around $600 million, a source close to the deal told Reuters on Friday.

The source added that VTB does not plan to keep the assets in its portfolio for the long term.

Alrosa, which produces about one-quarter of the world's rough diamonds, planned to sell its oil and gas licences to a private Russian oil major, the company's chief executive officer said in June. [ID:nL6123560]

"Alrosa is selling its oil and gas assets for around $600 million and it is close to closing the deal. VTB's participation is only part of a complex transaction," the source close to the deal told Reuters.

The state-controlled bank's investment arm, VTB Capital, is advising Alrosa on the deal, but VTB has no intention to run an oil business, he added.

The source gave no indication as to who the final buyer of the assets might be.

Alrosa is struggling with losses as diamond producers across the globe have been hit by weak demand as the world economy suffers its worst financial crisis since the Great Depression and consumers tighten their belts.

In Russia the crisis has hit many industries which borrowed heavily abroad to fund expansion and are currently struggling to refinance debt. [ID:nDEBTRU]

Russian banks are actively involved in the large number of recent M&A deals that are part of debt restructuring talks, under which companies agree to sell non-core assets or pledge their holdings as collateral for securitised loans.

(Reporting by Dmitry Sergeyev; editing by Simon Jessop)