Petra Diamonds, which reported a net debt of $622 million at the end of March, will try to raise $178 million by selling stock to shareholders, Rough & Polished reports. Investors would receive 5 shares for every 8 they currently hold at 40 pence each, according to the same source.
Petra’s heavy debt is attributed to several factors, including “a strike action in South Africa, a strong Rand, delay in bringing the new plant at Cullinan on stream and an embargo on diamond exports from Tanzania”.
Petra’s CEO Johan Dippenaar said: “By improving the group’s financial and operational flexibility, the board believes this rights issue is in the best interest of its shareholders, positioning Petra to reap the benefits of this capital intensive phase by moving the focus to cost efficient production from the new undiluted mining blocks, with a reduced capital spend profile.
