Petra Diamonds (LON: PDL), the South African diamond miner, has secured at least $20m of short-term liquidity through an advance-payment deal with a diamond buyer, according to its stock exchange statement today. Its senior secured lender has also agreed to forbear, meaning hold off enforcing on defaults, for up to 12 months.
The shares are suspended, so there is no market reaction to the news. The last close was 2.3 on Friday the 30th of October. The company said audit delays stopped it publishing FY26 results on time, which resulted in the suspension. That close is about 66% below 6.74 on the 30th of September, the day before its strategic review began.
The company said its Cullinan Mine has signed a binding agreement with an unnamed mid-stream diamantaire, a buyer that cuts and sells stones. The buyer will make available at least $20m through revolving advance payments against all future production. Cullinan can end the arrangement at any time without penalty if it repays what is outstanding.
The lender’s forbearance lasts until the earlier of 12 months from the date of its letter or full repayment of the advances, subject to ongoing conditions. The company said the two together provide near-term liquidity and stability while the review seeks a long-term financing solution.
The first quarter was weak. Revenue was $21m, against $30m in the previous quarter, as the average price fell to $63 a carat from $76. Net debt rose to $348m from $322m at the end of June, with unrestricted cash of $7m. Its R1.75bn ($107m) revolving credit facility and R300m Absa facility are both fully drawn.
Chief executive Vivek Gadodia described the review, which began on the 1st of October, as running three tracks at once.
The Strategic Review can be summarised as concurrently progressing three distinct workstreams – short-term liquidity support, a consensual refinancing, and/or a sale of the Company’s assets, with a view to maximising the possible outcomes for the Company’s stakeholders.
Vivek Gadodia, Chief Executive Officer, Petra Diamonds
The company said there is no certainty of the outcome. Our reading is that this is a stopgap: the advances are repayable, and $20m is small against $348m of net debt. Petra will seek to restore trading once audited accounts are published, and the audit is still under way.