It also involves an increase to Petra’s authorized share capital through the creation of 8.5-million ordinary shares and the authorization for directors to allot ordinary shares up to £88,447 (being just over 8.8-million ordinary shares).
Petra Diamonds’ weak financial position, a product of stagnant demand and heavy borrowing to expand its mines, particularly the iconic Cullinan, pushed it to put itself up for sale in June. Petra reversed the decision in October, opting instead for the debt-for-equity restructuring approved today.
The company noted it expected to complete the reorganization in the first quarter of 2021.
Its shares slumped by more than 80% last year as the covid-19 pandemic battered the global diamond sector, with mines forced to shut down while consumer demand continue to fall.
The diamond miner, which has three operations in South Africa and one in Tanzania, is also dealing with allegations of human rights abuses at its Williamson mine in Tanzania, resulting from the actions of its security guards.