RE: news27 Mar 2020 13:38
Liquidity and Capital Structure
As at 31 December 2019, the Group had bank debt facilities undrawn and available of ZAR 1.5 billion (ca. US$107.2 million), in addition to diamond debtors of US$12.8 million and cash at bank of US$53.6 million. Petra is in close contact with its South African lender group, which remains supportive of the Company.
Petra continues to closely monitor and manage its liquidity risk. Cash forecasts are regularly produced and run for different scenarios, which now include the aforementioned potential impact of protracted production shutdowns and uncertainty around diamond sales in the short-term. The impact of weaker diamond prices is partially offset by a weakening South African Rand, currently trading at around ZAR17.45:USD1 compared to an average rate of ZAR14.69:USD1 for the six months to 31 December 2019 (H1 FY 2020).
In light of the above, Petra is in active discussions with its South African lender group, which remains supportive of the Company, in relation to the provision of near-term liquidity.
The Company will also be engaging with the Group's financial stakeholders in relation to the implications of the unprecedented operating and trading environment for its capital structure, including the strategic options open to the Company in relation to the maturity of its US$650 million loan notes in May 2022. For these purposes, the Company has engaged Rothschild & Co and Ashurst LLP as its financial and legal advisers respectively.
Outlook
Given the continued uncertainty around the outlook for control of the COVID-19 in South Africa, FY 2020 production guidance of 3.8 million carats is suspended until the Company is in a better position to quantify the full impact of the lockdown.
Richard Duffy, CEO of Petra Diamonds, commented:
“We are taking all actions necessary to support the measures to limit the outbreak of the COVID-19 in the countries in which we operate and to decrease the threat to our employees, contractors and other local stakeholders. While Petra has been running well operationally, with production ahead of guidance, the scaled down mining operations and sales disruptions will cause a negative impact in the short-term. However, we have the foundations in place to continue to deliver long-term, sustainable operations and we remain committed to protecting their ongoing viability, to the benefit of all our stakeholders.”
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
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