{"id":1181803,"date":"2020-05-01T05:54:36","date_gmt":"2020-05-01T10:54:36","guid":{"rendered":"https:\/\/www.mining.com\/?p=1022431"},"modified":"2020-05-01T05:54:36","modified_gmt":"2020-05-01T10:54:36","slug":"petra-diamonds-delays-interest-payment-to-borrow-21m","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1181803","title":{"rendered":"Petra Diamonds delays interest payment to borrow $21m"},"content":{"rendered":"<p>South Africa\u2019s Petra Diamonds<br \/>\n(LON:PDL) has swayed bondholders to receiving an interest due to be pay today at<br \/>\na later day, which would allow it to borrow R400 million ($21m) in new debt, a<br \/>\nkey move to keep the miner afloat.<\/p>\n<div class='d-flex justify-content-center d-xs-block d-sm-block d-md-none'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>Petra, which has been hit by a triple whammy of weak market conditions,\u00a0<a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.mining.com\/petra-diamonds-halts-all-mines-in-south-africa-due-to-power-issues\/\" >power emergencies<\/a> in the home country and now the coronavirus pandemic, <a href=\"https:\/\/ir.q4europe.com\/solutions\/petradiamonds\/3144\/newsArticle.aspx?storyid=14684098\"  rel=\"noreferrer noopener\" aria-label=\"said on Friday (opens in a new tab)\">said on Friday<\/a> that it has been able to secure a R1 billion revolving credit facility (RCF), with conditions.<\/p>\n<p>The provisions set by Absa, Nedbank<br \/>\nand Rand Merchant Bank, demand a temporary halt to the repayment of a black<br \/>\neconomic empowerment (BEE) scheme. They have also asked for a suspension of<br \/>\nthis year\u2019s first instalment of a semi-annual 7.25% interest payment on a $650<br \/>\nmillion convertible loan note. <\/p>\n<p>Failing to pay interest after a<br \/>\n30-day grace period allowed (May 30) could see bondholders force the redemption<br \/>\nof their bonds with interest. Such move could only happen if it has the support<br \/>\nof 25% of the company\u2019s bondholders.<\/p>\n<p>Investment banks are increasingly<br \/>\nreluctant to extend credit to diamond producers, as inventory is not being sold<br \/>\nand defaults are possible, analysts have warned.<\/p>\n<p>\u201cWe are concerned about oversupply<br \/>\nof rough diamonds following the reopening of economies as a lot of inventory<br \/>\ncould potentially be flooded into the system and the market might not be able<br \/>\nto absorb all of it, resulting in increased pricing pressure,\u201d Citi said in a<br \/>\nnote Friday.<\/p>\n<h2><strong>Financial crunch<\/strong><\/h2>\n<p>Petra Diamonds has tried to turn<br \/>\naround its fortunes&nbsp;<a href=\"https:\/\/mining.com\/petra-diamonds-ceo-leave-following-shares-value-dip-debt-increase\/\"  rel=\"noreferrer noopener\">after piling up debt<\/a>&nbsp;to expand its flagship Cullinan<br \/>\nmine in South Africa, where the world\u2019s largest-ever diamond was found in<br \/>\n1905.&nbsp;The renowned open-pit mine produces about a quarter of the world\u2019s<br \/>\ngem-quality diamonds, and the vast majority of blue stones.<\/p>\n<p>The company\u2019s share price collapsed<br \/>\nto a record low amid falling diamond prices that forced it to&nbsp;<a href=\"https:\/\/www.mining.com\/petra-diamonds-ceo-leave-following-shares-value-dip-debt-increase\/\"  rel=\"noreferrer noopener\">write down the value of its mines<\/a>&nbsp;in September by<br \/>\nalmost $250 million.<\/p>\n<p>The financial struggles prompted<br \/>\nthe miner to launch a restructuring that&nbsp;ended in November with&nbsp;<a href=\"https:\/\/www.mining.com\/blue-diamond-found-by-struggling-petra-sold-for-14-9-million\/\"  rel=\"noreferrer noopener\">a number of organizational changes<\/a>, including dropping the<br \/>\nrole of chief operating officer.<\/p>\n<p>The restructuring saw the company\u2019s founder and chairman for 23 years, Adonis Pouroulis, <a href=\"https:\/\/www.mining.com\/petra-diamonds-founder-steps-down\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">step down in March<\/a>.<\/p>\n<p>Around the same time, Petra had to declare<br \/>\nforce majeure at its Williamson diamond mine in Tanzania and scaled down<br \/>\noperations to a minimum level in South Africa. <\/p>\n<p>The decision, <a href=\"https:\/\/www.mining.com\/petra-diamonds-halts-2020-production-guidance-on-covid-19\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">the company said<\/a>, was based not only on poor diamond prices, but also the effect the global coronavirus lockdown has had on sales.<\/p>\n<p>Petra said on Friday that salaries for<br \/>\nits chief executive and finance director have been cut by one-third from April<br \/>\nto June, while its non-executive directors will see 25% reduction in their pay.<\/p>\n<p>It also said that its South African<br \/>\noperations has ramped up to a 50% labour capacity, but noted that Williamson remained<br \/>\non care and maintenance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Move would allow Petra to draw 400 million ($21m) rand of a 1 billion rand revolving credit facility to keep afloat.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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