Last checked at 
* Petra agrees restructuring deal with debt holders
* Plan will give noteholders 91% of the company
* Shares down 9.6%
(Writes through, add shares)
By Helen Reid and Yadarisa Shabong
Oct 20 (Reuters) - Petra Diamonds has abandoned
plans to sell the business in favour of a debt-for-equity
restructuring, it said on Tuesday, sending its shares down as
much as 18%.
The London-listed company, which mines diamonds in South
Africa and Tanzania, had put itself up for sale in June as part
of the restructuring process but has received no viable offers,
it said.
Its shares have slumped by more than 80% this year as the
COVID-19 pandemic has battered the global diamond sector, with
mines forced to shut down while consumer demand collapsed. The
shares opened with an 18% drop and by 0719 GMT were down 9.6% at
1.7 pence.
Petra debt holders will contribute a total of about $337
million of new liquidity in the form of senior secured
second-lien debt, with remaining notes converted into equity.
That would leave noteholders together holding 91% of the
company, diluting existing shareholders to a combined stake of
only 9%.
Petra said it expects to seal a "lock-up agreement"
cementing the terms with the noteholder group and South African
lenders in early November. It expects the restructuring to
become effective in the first quarter of 2021.
The agreement also includes new governance arrangements and
cashflow controls.
Petra Chief Executive Richard Duffy expressed the company's
gratitude to the noteholder group and South African lenders for
their agreement in principle to provide "meaningful additional
liquidity" in what has been a difficult period.
(Reporting by Helen Reid in Johannesburg and Yadarisa Shabong
in Bengaluru
Editing by Louise Heavens and David Goodman)
