Rapaport News




Advanced search
Latest Articles
Rough Markets
Polished Markets

Petra to Postpone Debt Repayment

Miner chooses to put cash into the business during 30-day grace period banks have offered.
May 3, 2020 10:56 AM   By Rapaport News
Print Print Facebook Facebook Twitter Twitter Share Share

Petra Diamonds plans to delay the next interest payment on its $650 million bond to preserve liquidity for business operations.

The miner has spoken to its lenders about drawing on its revolving credit facility, it said Friday. However, while those lenders have approved the use of up to ZAR 400 million ($21.3 million), Petra is restricted from using those funds to cover the debt’s interest payments, which are due twice a year, on May 1 and November 1, it noted.

Under the terms of the debt, Petra is allowed a 30-day grace period before it will be considered to have defaulted on the payment. In the event of a default, the holders of the note can declare it immediately due in full.

While Petra has the money to make the interest payment, it is choosing to take advantage of the grace period until May 30, and instead use its cash for running the business in the short term, it said. Petra has also been informed that a group of lenders holding more than 50% of the outstanding amount has retained both a financial and legal adviser. The company plans to work with the holders’ advisers to try to work out repayment terms before May 30, it added.

“Discussions with the South African lender group and the holder advisers are progressing well and the board is confident that, subject to the agreement of definitive legal documents, the company will be able to manage its near-term liquidity risks while continuing discussions with various stakeholders regarding strategic alternatives to improve the company’s long-term capital structure,” Petra said.

The miner’s South African sites are currently operating at 50% capacity, after the government eased restrictions on the mining sector on April 16 following a nationwide lockdown. Petra has implemented a number of health-and-safety measures according to government guidelines. Its operations in Tanzania remain on care and maintenance for the foreseeable future.

The company has suspended its production guidance for 2020 until it can assess the full impact of the shutdown on its total output.

Image: Petra’s Finsch mine in South Africa. (Petra Diamonds)
Print Print Facebook Facebook Twitter Twitter Share Share
Tags: bond, Cullinan, debt repayment, Finsch, petra, Petra Diamonds, Rapaport News, Williamson
Similar Articles
Petra Diamonds Finsch mine conveyor beltPetra in the Red as Mines Lose Value
Nov 17, 2020
Petra Diamonds saw heavy losses in the latest fiscal year...
De Beers Exec Jonathan Kendall to Retire
Dominion Nears Deal to Restart Ekati
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First

Call Us: 1-702-893-9400
Member License Agreement   RapNet Trading Rules & Code of Conduct    Privacy Policy  
twitter twitter
About Rapaport
Advertise with us