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.
Fighting debt
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 today.
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 fresh abuses claims. The probe is being carried out by a specialist external advisor in conjunction with the company’s lawyers.
