close

Petra Diamonds puts up ‘for sale’ sign

Loading in operation at the Koffiefontein open pit

Petra Diamonds, which owns three diamond mines in South Africa and one in Tanzania, has announced the business is up for sale.

As part of a company review, London-listed Petra has revealed it is seeking offers, but has received none so far and could cancel the decision at any time.

Rothschild & Co. is acting as strategic adviser of the transaction and bidders can express interest in all or part of its assets.

Story continues below
Advertisement

Petra Diamonds launched a strategic review of its finances in March, particularly looking at the $650 million (£527m) outstanding 7.25% senior secured notes that are due for repayment on May 1, 2022.

A statement from the company says: “Pursuant to this strategic review and in order to assess all strategic options to maximise value to its stakeholders, the Board of Petra Diamonds Limited announces today that it has decided to seek offers for the Company, or for parts of the business or assets of the Petra Diamonds group.”

In its most recent financial results, for the third quarter ending March 31, revenue fell by 32%, due in part to weak sales at its March tender, which was affected by the pandemic.

The financially troubled company has been in talks with its creditors to shore-up finances as the Covid-19 pandemic forced it to scale back operations in a troubled diamond market.

Seeking potential buyers offers is a standard part of restructuring processes where the company weighs all options.

The company’s shares closed 3.3% higher at 2.17 pence on Friday before the announcement was made. The stock is down 75% for the year owing to a long list of woes.

Petra had to push back its cash flow and debt reduction targets in February after Chinese demand for diamonds took a hit, while it also works to fix its balance

Founded in 1997, Petra owns the Finsch, Cullinan, and Koffiefontein mines in South Africa, as well as the Williamson mine in Tanzania, which is currently under care and maintenance. All those properties were purchased from their original owner, De Beers.

Tags : coronavirusPetra Diamonds
mm

The author Stacey Hailes

Editor, Professional Jeweller

Leave a Response