Petra Diamonds completes restructuring
Petra Diamonds (LON: PDL) said on Wednesday it had completed its restructuring, aimed at recapitalizing the business, which involved new governance arrangements and cashflow controls.
Petra Diamonds is a diamond producer based in the tax haven Jersey. The company, founded in 1997 by Adonis Pouroulis, has taken over five mines from de Beers. In 2015, 17.1 million tons of ore were mined, from which 3.2 million carats of diamonds were extracted. Petra Diamonds is currently exploring in the Kalahari in Botswana and at Reivilo near the Finsch Pit.
As part of the move, announced in October 2020, the miner has partially reinstated notes debt with holders of existing notes, contributing $30 million in new money.
Each of these will take the form of a new senior second lien note.
The new notes amount to about $337-million, and the remainder of the notes debt will be converted into equity, resulting in the noteholder group holding 91% of the enlarged share capital of Petra.
The diamond miner, which has just sold a 299.3 carat diamond for $12.18 million, also announced that the appointment to the Board as a non-executive director of Matthew Glowasky, has become effective immediately.
Petra Diamonds began 2020 in a fragile financial state due to stagnant demand and heavy borrowing to expand its mines, particularly the iconic Cullinan.
Its weak position pushed Petra to put itself up for sale in June. The miner reversed the decision in October, opting instead for the debt-for-equity restructuring completed Wednesday.
Petra’s shares slumped by more than 80% last year as the covid-19 pandemic battered the global diamond sector, with mines forced to shut down while consumer demand continued to fall.
The diamond miner, which has three operations in South Africa and one in Tanzania, is also dealing with allegations of human rights abuses at its Williamson mine in Tanzania, resulting from the actions of its security guards.
Petra formed in February an internal committee to oversee an ongoing investigation on new abuse claims. The probe is being carried out by a specialist external advisor in conjunction with the company’s lawyers.