May 19, 2016 / 9:15 AM / 3 years ago

UPDATE 1-Chinese investors interested in privatisation of Russia's Alrosa -TASS

(Adds details, quotes, context)

MOSCOW, May 19 (Reuters) - Chinese investors are interested in taking part in the government sell-off of a 10.9 percent stake in Russian diamond miner Alrosa, the TASS news agency quoted Alrosa chief executive Andrey Zharkov as saying on Thursday.

Alrosa, the world’s largest producer of rough diamonds in carats, competes with De Beers, a unit of Anglo American and the world’s leading diamond miner in terms of value. Together they produce more than a half of the world’s rough diamonds.

“We see potential interest from Chinese investors in the company, in the possibility of acquiring shares in the company,” Zharkov told reporters in Hong Kong.

Russia plan to sell part of the government’s stakes in Alrosa, as well as in the country’s second-largest lender VTB Bank and mid-sized oil producer Bashneft later this year to keep the budget deficit within a 3 percent of GDP target amid weak oil prices.

According to Zharkov, Alrosa held a presentation for Chinese investors during a recent visit by Russian Deputy Prime Minister Yuri Trutnev to Asia.

Trutnev is in charge of Russia’s far eastern regions, which share a border with China and in which Alrosa’s main production assets are based.

Shares in Alrosa were up 0.3 percent in Moscow on Thursday, outperforming Moscow’s broader MICEX index, which was down 0.8 percent.

Its market capitalisation has risen 41 percent to 585 billion roubles ($8.8 billion) so far this year on the back of an improvement in the diamond market.

China is the world’s largest manufacturer of diamond jewellery and Asia is the second largest global market for diamond jewellery retail sales after the United States. ($1 = 66.2416 roubles) (Reporting by Polina Devitt and Alexander Winning; editing by Dmitry Solovyov and Jon Boyle)

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