Petra Diamonds Regulatory News (PDL)

1 Mar 2007 07:52

Petra Diamonds Ld01 March 2007 Petra Diamonds Limited US$20 Million Convertible Loan Petra Diamonds Limited ("Petra" or "the Company") (AIM / ASX: PDL) announcesthat it has entered into a US$20 million unsecured, interest bearing convertibleloan agreement ("the Convertible Loan") with BHP Development Finance ProprietaryLimited, a company within the BHP Billiton group ("BHP Billiton"). Highlights • The Convertible Loan is unsecured and interest is payable, on an annual basis, at LIBOR plus 2% per annum; the Convertible Loan plus interest accrued but not paid is convertible by BHP Billiton into Petra shares at a price of 180 pence per share - representing a 22.2% premium to the 30 day average mid-market Petra share price to 23 February 2007 of 147.26 pence, when the conversion price was set; the loan principal of US$20 million is to be repaid on 1 March 2010 if not converted or repaid beforehand • The Convertible Loan will further strengthen Petra's treasury without diluting existing shareholders at the current market price, giving Petra greater flexibility to act on potential growth opportunities, with special focus on Angola Adonis Pouroulis, Petra's Chairman, comments: "Our relationship with BHPBilliton continues to go from strength to strength. The Convertible Loan adds toPetra's treasury, giving the Company the ability to consider opportunities thathave the potential to fast-track Petra's development and further entrench theCompany as a true mid-tier diamond group." Details of the Convertible Loan The Convertible Loan is unsecured, bears interest at LIBOR plus 2% and, togetherwith any interest accrued but not paid, is convertible at the election of BHPBilliton into Petra ordinary shares at a price of 180 pence per share ("theConversion Price"). The number of Petra ordinary shares to be issued will becalculated by reference to the £/US$ exchange rate on the business dayimmediately prior to the date of conversion. If not converted or repaidbeforehand, the principal amount of the Convertible Loan (US$20 million) is tobe repaid on 1 March 2010. The Convertible Loan may only be converted in full.Of the total loan of US$20 million, US$17.5 million is ring fenced for use inAngola, with the balance being for use across the Petra group as the Companysees fit. Reasons for issuing the Convertible Petra's stated objective is to become a true mid-tier diamond group and withthat objective in mind the Company continues to scrutinise appropriate businessopportunities in the diamond sector. The Convertible Loan will furtherstrengthen Petra's treasury, giving the Company greater flexibility to act onpotential growth opportunities (with special focus on Angola), without dilutingexisting shareholders at the current market price. BHP Billiton BHP Billiton already holds 4,134,366 Petra ordinary shares, representing 2.74%of Petra's current issued ordinary share capital. Based on this holding andcurrent £/US$ exchange rates, on conversion of the principal Convertible LoanBHP Billiton would then hold approximately 9,832,372 million Petra ordinaryshares, representing 6.29% of the Company's enlarged ordinary share capital. Ends For further information, please contact or visit www.petradiamonds.com Cathy Malins / Annabel Leather Telephone: +44 (0) 20 7851 7480Parkgreen Communications, London This information is provided by RNS The company news service from the London Stock Exchange