(Corrects to show debtholders to contribute $30 million,
removes reference to $337 million of new liquidity, paragraph 4)
* Petra agrees restructuring deal with debt holders
* Plan will give noteholders 91% of the company
* Shares down 9.6%
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 said its existing $650 million note debt will be
partly replaced by new notes of around $295 million, and
debtholders will contribute $30 million.
The remaining note debt will be converted into equity,
leaving debtholders 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)
Petra Diamonds (PDL)