Petra’s Fisch mine signs IFC facilityComment on this story
Petra Diamonds’ wholly owned subsidiary‚ Finsch Diamond Mine (FDM)‚ has agreed a US$25m revolving credit facility with IFC - a member of the World Bank Group.
The new facility has been put in place in addition to the R300m (approximately $36.9m) Rand Merchant Bank (RMB) revolving credit facility announced in November 2011.
On completion of the IFC agreement‚ the R300m RMB facility will reduce to R200m (approximately $24.6m)‚ so that the lenders together provide about $49.6m in revolving credit facilities to Petra.
The $25M IFC and R200M RMB revolving credit facilities are in addition to the debt facilities of approximately $76.9m put in place in November 2010 with the same institutions - $40m with IFC and approximately $36.9m with RMB.
Other than the revolving credit and debt facilities above‚ Petra also has working capital (overdraft) facilities with RMB/FirstRand Bank of about $20.9m (R170m).
Petra’s total bank debt facilities now amount to $147.4m. It has drawn down $36.5m of the IFC 2010 debt facility and $32.9m (R267.1m) of the RMB 2010 debt facility. All other facilities remain undrawn‚ leaving $78m available.
Petra said that‚ given the lead times between the group’s now larger diamond tenders (after the acquisition of the Finsch mine) and the volatility experienced over the past 12 months in both the rand and diamond prices‚ these new credit facilities provided Petra with additional scope and flexibility to execute its capital expenditure programme and bring its stated production and revenue growth opportunities to account.
As announced in the company’s recent interim management statement‚ Petra has begun discussions with its bankers with regards to the longer-term restructuring of the group’s debt requirements.
It was an opportune time to revisit the group’s debt levels‚ terms and structure‚ given that Finsch was not part of the group when the original debt financing was put in place in 2010 and given the other positive group developments since this time‚ it said.
Petra CEO Johan Dippenaar said these combined IFC and RMB facilities further strengthened Petra’s financial position and the company’s ability to deliver on its core objective of rolling out its stated expansion plans and ramping up production to over 5 million carats a year by 2019. - I-Net Bridge